Correlation Between Curaleaf Holdings and Cronos
Can any of the company-specific risk be diversified away by investing in both Curaleaf Holdings and Cronos 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 Curaleaf Holdings and Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Curaleaf Holdings and Cronos Group, you can compare the effects of market volatilities on Curaleaf Holdings and Cronos 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 Curaleaf Holdings with a short position of Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curaleaf Holdings and Cronos.
Diversification Opportunities for Curaleaf Holdings and Cronos
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Curaleaf and Cronos is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Curaleaf Holdings and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and Curaleaf Holdings 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 Curaleaf Holdings are associated (or correlated) with Cronos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos Group has no effect on the direction of Curaleaf Holdings i.e., Curaleaf Holdings and Cronos go up and down completely randomly.
Pair Corralation between Curaleaf Holdings and Cronos
Assuming the 90 days horizon Curaleaf Holdings is expected to generate 1.85 times less return on investment than Cronos. In addition to that, Curaleaf Holdings is 1.62 times more volatile than Cronos Group. It trades about 0.01 of its total potential returns per unit of risk. Cronos Group is currently generating about 0.03 per unit of volatility. If you would invest 170.00 in Cronos Group on August 27, 2024 and sell it today you would earn a total of 38.00 from holding Cronos Group or generate 22.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Curaleaf Holdings vs. Cronos Group
Performance |
| Timeline |
| Curaleaf Holdings |
| Cronos Group |
Curaleaf Holdings and Cronos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Curaleaf Holdings and Cronos
The main advantage of trading using opposite Curaleaf Holdings and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curaleaf Holdings position performs unexpectedly, Cronos 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 Cronos will offset losses from the drop in Cronos' long position.The idea behind Curaleaf Holdings and Cronos Group 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.| Cronos vs. OrganiGram Holdings | Cronos vs. Aurora Cannabis | Cronos vs. SNDL Inc | Cronos vs. Canopy Growth Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |