Correlation Between Cronos and Ontology Gas
Can any of the company-specific risk be diversified away by investing in both Cronos and Ontology Gas 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 Ontology Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cronos and Ontology Gas, you can compare the effects of market volatilities on Cronos and Ontology Gas 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 Ontology Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cronos and Ontology Gas.
Diversification Opportunities for Cronos and Ontology Gas
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cronos and Ontology is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cronos and Ontology Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontology Gas 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 Ontology Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontology Gas has no effect on the direction of Cronos i.e., Cronos and Ontology Gas go up and down completely randomly.
Pair Corralation between Cronos and Ontology Gas
Assuming the 90 days trading horizon Cronos is expected to under-perform the Ontology Gas. In addition to that, Cronos is 1.1 times more volatile than Ontology Gas. It trades about -0.64 of its total potential returns per unit of risk. Ontology Gas is currently generating about -0.13 per unit of volatility. If you would invest 28.00 in Ontology Gas on November 28, 2024 and sell it today you would lose (3.00) from holding Ontology Gas or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cronos vs. Ontology Gas
Performance |
| Timeline |
| Cronos |
| Ontology Gas |
Cronos and Ontology Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cronos and Ontology Gas
The main advantage of trading using opposite Cronos and Ontology Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos position performs unexpectedly, Ontology Gas 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 Ontology Gas will offset losses from the drop in Ontology Gas' long position.The idea behind Cronos and Ontology Gas 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.| Ontology Gas vs. Ontology | Ontology Gas vs. Staked Ether | Ontology Gas vs. Phala Network | Ontology Gas vs. EigenLayer |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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