Correlation Between Tezos and Cronos
Can any of the company-specific risk be diversified away by investing in both Tezos 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 Tezos and Cronos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tezos and Cronos, you can compare the effects of market volatilities on Tezos 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 Tezos with a short position of Cronos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tezos and Cronos.
Diversification Opportunities for Tezos and Cronos
Very poor diversification
The 3 months correlation between Tezos and Cronos is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tezos and Cronos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos and Tezos 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 Tezos 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 Tezos i.e., Tezos and Cronos go up and down completely randomly.
Pair Corralation between Tezos and Cronos
Assuming the 90 days trading horizon Tezos is expected to generate 1569.67 times less return on investment than Cronos. But when comparing it to its historical volatility, Tezos is 1.1 times less risky than Cronos. It trades about 0.0 of its potential returns per unit of risk. Cronos is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9.44 in Cronos on January 24, 2024 and sell it today you would earn a total of 3.56 from holding Cronos or generate 37.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tezos vs. Cronos
Performance |
| Timeline |
| Tezos |
| Cronos |
Tezos and Cronos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tezos and Cronos
The main advantage of trading using opposite Tezos and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tezos 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 Tezos 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |