Correlation Between Crown Electrokinetics and CN Energy

Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and CN Energy 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 Crown Electrokinetics and CN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crown Electrokinetics Corp and CN Energy Group, you can compare the effects of market volatilities on Crown Electrokinetics and CN Energy 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 Crown Electrokinetics with a short position of CN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and CN Energy.

Diversification Opportunities for Crown Electrokinetics and CN Energy

0.53

Correlation Coefficient

Crown Electrokinetics  CN Energy

Very weak diversification

The 3 months correlation between Crown and CNEY is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and CN Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN Energy Group and Crown Electrokinetics 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 Crown Electrokinetics Corp are associated (or correlated) with CN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN Energy Group has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and CN Energy go up and down completely randomly.

Pair Corralation between Crown Electrokinetics and CN Energy

Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the CN Energy. In addition to that, Crown Electrokinetics is 1.12 times more volatile than CN Energy Group. It trades about -0.04 of its total potential returns per unit of risk. CN Energy Group is currently generating about 0.0 per unit of volatility. If you would invest  2,400  in CN Energy Group on September 13, 2024 and sell it today you would lose (2,367) from holding CN Energy Group or give up 98.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Crown Electrokinetics Corp  vs.  CN Energy Group

Crown Electrokinetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Electrokinetics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

CN Energy Group

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CN Energy Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, CN Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crown Electrokinetics and CN Energy

The main advantage of trading using opposite Crown Electrokinetics and CN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Electrokinetics position performs unexpectedly, CN Energy 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 CN Energy will offset losses from the drop in CN Energy's long position.

The idea behind Crown Electrokinetics Corp and CN Energy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.