Correlation Between Cronos and Theta Network
Can any of the company-specific risk be diversified away by investing in both Cronos and Theta Network 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 Theta Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cronos and Theta Network, you can compare the effects of market volatilities on Cronos and Theta Network 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 Theta Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cronos and Theta Network.
Diversification Opportunities for Cronos and Theta Network
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cronos and Theta is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cronos and Theta Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theta Network 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 Theta Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theta Network has no effect on the direction of Cronos i.e., Cronos and Theta Network go up and down completely randomly.
Pair Corralation between Cronos and Theta Network
Assuming the 90 days trading horizon Cronos is expected to generate 3.12 times more return on investment than Theta Network. However, Cronos is 3.12 times more volatile than Theta Network. It trades about 0.31 of its potential returns per unit of risk. Theta Network is currently generating about 0.4 per unit of risk. If you would invest 7.68 in Cronos on August 27, 2024 and sell it today you would earn a total of 12.32 from holding Cronos or generate 160.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cronos vs. Theta Network
Performance |
| Timeline |
| Cronos |
| Theta Network |
Cronos and Theta Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cronos and Theta Network
The main advantage of trading using opposite Cronos and Theta Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos position performs unexpectedly, Theta Network 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 Theta Network will offset losses from the drop in Theta Network's long position.The idea behind Cronos and Theta Network 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.| Theta Network vs. Theta Fuel | Theta Network vs. Staked Ether | Theta Network vs. EigenLayer | Theta Network vs. EOSDAC |
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
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |