Correlation Between Madrigal Pharmaceuticals and Cronos

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals and Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Madrigal Pharmaceuticals and Cronos Group, you can compare the effects of market volatilities on Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals with a short position of Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madrigal Pharmaceuticals and Cronos.

Diversification Opportunities for Madrigal Pharmaceuticals and Cronos

MadrigalCronosDiversified AwayMadrigalCronosDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Madrigal and Cronos is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Madrigal Pharmaceuticals and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals i.e., Madrigal Pharmaceuticals and Cronos go up and down completely randomly.

Pair Corralation between Madrigal Pharmaceuticals and Cronos

Given the investment horizon of 90 days Madrigal Pharmaceuticals is expected to generate 1.28 times less return on investment than Cronos. In addition to that, Madrigal Pharmaceuticals is 1.16 times more volatile than Cronos Group. It trades about 0.05 of its total potential returns per unit of risk. Cronos Group is currently generating about 0.08 per unit of volatility. If you would invest  190.00  in Cronos Group on November 25, 2024 and sell it today you would earn a total of  7.00  from holding Cronos Group or generate 3.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Madrigal Pharmaceuticals  vs.  Cronos Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-5051015
JavaScript chart by amCharts 3.21.15MDGL CRON
       Timeline  
Madrigal Pharmaceuticals 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Madrigal Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Madrigal Pharmaceuticals is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb270280290300310320330340350
Cronos Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Cronos Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.851.91.9522.052.12.152.2

Madrigal Pharmaceuticals and Cronos Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.63-7.96-5.29-2.620.02.665.428.1710.9313.69 0.020.040.060.08
JavaScript chart by amCharts 3.21.15MDGL CRON
       Returns  

Pair Trading with Madrigal Pharmaceuticals and Cronos

The main advantage of trading using opposite Madrigal Pharmaceuticals and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madrigal Pharmaceuticals 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 Madrigal Pharmaceuticals 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.
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Stocks Directory
Find actively traded stocks across global markets