Correlation Between Enjin Coin and Cronos
Can any of the company-specific risk be diversified away by investing in both Enjin Coin 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 Enjin Coin and Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enjin Coin and Cronos, you can compare the effects of market volatilities on Enjin Coin 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 Enjin Coin with a short position of Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enjin Coin and Cronos.
Diversification Opportunities for Enjin Coin and Cronos
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Enjin and Cronos is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Enjin Coin and Cronos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos and Enjin Coin 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 Enjin Coin 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 has no effect on the direction of Enjin Coin i.e., Enjin Coin and Cronos go up and down completely randomly.
Pair Corralation between Enjin Coin and Cronos
Assuming the 90 days trading horizon Enjin Coin is expected to under-perform the Cronos. In addition to that, Enjin Coin is 1.26 times more volatile than Cronos. It trades about -0.29 of its total potential returns per unit of risk. Cronos is currently generating about -0.12 per unit of volatility. If you would invest 14.00 in Cronos on January 20, 2024 and sell it today you would lose (2.00) from holding Cronos or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enjin Coin vs. Cronos
Performance |
| Timeline |
| Enjin Coin |
| Cronos |
Enjin Coin and Cronos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enjin Coin and Cronos
The main advantage of trading using opposite Enjin Coin and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enjin Coin 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 Enjin Coin and Cronos 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |