Correlation Between Cronos and ANT
Can any of the company-specific risk be diversified away by investing in both Cronos and ANT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cronos and ANT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cronos and ANT, you can compare the effects of market volatilities on Cronos and ANT and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cronos with a short position of ANT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cronos and ANT.
Diversification Opportunities for Cronos and ANT
Excellent diversification
The 3 months correlation between Cronos and ANT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cronos and ANT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANT and Cronos is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cronos are associated (or correlated) with ANT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANT has no effect on the direction of Cronos i.e., Cronos and ANT go up and down completely randomly.
Pair Corralation between Cronos and ANT
Assuming the 90 days trading horizon Cronos is expected to generate 18.43 times less return on investment than ANT. But when comparing it to its historical volatility, Cronos is 9.89 times less risky than ANT. It trades about 0.07 of its potential returns per unit of risk. ANT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 833.00 in ANT on October 25, 2024 and sell it today you would lose (686.00) from holding ANT or give up 82.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cronos vs. ANT
Performance |
| Timeline |
| Cronos |
| ANT |
Cronos and ANT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cronos and ANT
The main advantage of trading using opposite Cronos and ANT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos position performs unexpectedly, ANT can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ANT will offset losses from the drop in ANT's long position.The idea behind Cronos and ANT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |