Correlation Between Cronos and Stratis

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

Diversification Opportunities for Cronos and Stratis

  Correlation Coefficient

Poor diversification

The 3 months correlation between Cronos and Stratis is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cronos and Stratis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratis 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 Stratis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratis has no effect on the direction of Cronos i.e., Cronos and Stratis go up and down completely randomly.

Pair Corralation between Cronos and Stratis

Assuming the 90 days trading horizon Cronos is expected to under-perform the Stratis. In addition to that, Cronos is 1.26 times more volatile than Stratis. It trades about -0.28 of its total potential returns per unit of risk. Stratis is currently generating about -0.1 per unit of volatility. If you would invest  59.00  in Stratis on September 5, 2022 and sell it today you would lose (11.00)  from holding Stratis or give up 18.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Cronos  vs.  Stratis

 Performance (%) 
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 January 2023. The current disturbance may also be a sign of long term up-swing for Cronos investors.

Cronos Price Channel

Stratis Performance
0 of 100
Over the last 90 days Stratis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Stratis is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stratis Price Channel

Cronos and Stratis Volatility Contrast

   Predicted Return Density   

Pair Trading with Cronos and Stratis

The main advantage of trading using opposite Cronos and Stratis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cronos position performs unexpectedly, Stratis 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 Stratis will offset losses from the drop in Stratis' long position.
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The idea behind Cronos and Stratis 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.
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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