Correlation Between Cronos and BlackBerry
Can any of the company-specific risk be diversified away by investing in both Cronos and BlackBerry 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 BlackBerry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cronos Group and BlackBerry, you can compare the effects of market volatilities on Cronos and BlackBerry 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 BlackBerry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cronos and BlackBerry.
Diversification Opportunities for Cronos and BlackBerry
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cronos and BlackBerry is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Cronos Group and BlackBerry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackBerry 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 Group are associated (or correlated) with BlackBerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackBerry has no effect on the direction of Cronos i.e., Cronos and BlackBerry go up and down completely randomly.
Pair Corralation between Cronos and BlackBerry
Assuming the 90 days trading horizon Cronos Group is expected to under-perform the BlackBerry. But the stock apears to be less risky and, when comparing its historical volatility, Cronos Group is 1.03 times less risky than BlackBerry. The stock trades about -0.03 of its potential returns per unit of risk. The BlackBerry is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 318.00 in BlackBerry on September 13, 2024 and sell it today you would earn a total of 76.00 from holding BlackBerry or generate 23.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cronos Group vs. BlackBerry
Performance |
| Timeline |
| Cronos Group |
| BlackBerry |
Cronos and BlackBerry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cronos and BlackBerry
The main advantage of trading using opposite Cronos and BlackBerry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos position performs unexpectedly, BlackBerry 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 BlackBerry will offset losses from the drop in BlackBerry's long position.The idea behind Cronos Group and BlackBerry 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.| BlackBerry vs. Air Canada | BlackBerry vs. Lightspeed Commerce | BlackBerry vs. Shopify | BlackBerry vs. Suncor Energy |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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