Correlation Between Cronos and Cardano

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

Diversification Opportunities for Cronos and Cardano

0.97
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Cronos and Cardano is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Cronos and Cardano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardano 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 Cardano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardano has no effect on the direction of Cronos i.e., Cronos and Cardano go up and down completely randomly.

Pair Corralation between Cronos and Cardano

Assuming the 90 days trading horizon Cronos is expected to under-perform the Cardano. But the crypto coin apears to be less risky and, when comparing its historical volatility, Cronos is 1.31 times less risky than Cardano. The crypto coin trades about -0.28 of its potential returns per unit of risk. The Cardano is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  119.00  in Cardano on March 29, 2022 and sell it today you would lose (69.00)  from holding Cardano or give up 57.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Cronos  vs.  Cardano

 Performance (%) 
      Timeline 
Cronos 
Cronos Performance
0 of 100
Over the last 90 days Cronos has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for Cronos investors.

Cronos Price Channel

Cardano 
Cardano Performance
0 of 100
Over the last 90 days Cardano has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for Cardano investors.

Cardano Price Channel

Cronos and Cardano Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Cronos and Cardano

The main advantage of trading using opposite Cronos and Cardano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos position performs unexpectedly, Cardano 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 Cardano will offset losses from the drop in Cardano's long position.
The idea behind Cronos and Cardano 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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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