Correlation Between Crown Electrokinetics and Coroware

Can any of the company-specific risk be diversified away by investing in both Crown Electrokinetics and Coroware 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 Coroware 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 Coroware, you can compare the effects of market volatilities on Crown Electrokinetics and Coroware 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 Coroware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Electrokinetics and Coroware.

Diversification Opportunities for Crown Electrokinetics and Coroware

-0.22

Correlation Coefficient

Crown Electrokinetics  Coroware

Very good diversification

The 3 months correlation between Crown and Coroware is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Crown Electrokinetics Corp and Coroware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coroware 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 Coroware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coroware has no effect on the direction of Crown Electrokinetics i.e., Crown Electrokinetics and Coroware go up and down completely randomly.

Pair Corralation between Crown Electrokinetics and Coroware

Given the investment horizon of 90 days Crown Electrokinetics Corp is expected to under-perform the Coroware. But the stock apears to be less risky and, when comparing its historical volatility, Crown Electrokinetics Corp is 53.85 times less risky than Coroware. The stock trades about -0.32 of its potential returns per unit of risk. The Coroware is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Coroware on September 5, 2024 and sell it today you would lose (0.01) from holding Coroware or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Crown Electrokinetics Corp  vs.  Coroware

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.

Coroware

Risk-Adjusted Performance

32 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Coroware are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Coroware demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crown Electrokinetics and Coroware

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

The idea behind Crown Electrokinetics Corp and Coroware 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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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.