Correlation Between Vericel Corp and Cronos

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

Diversification Opportunities for Vericel Corp and Cronos

-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Vericel and Cronos is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vericel Corp Ord and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and Vericel Corp 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 Vericel Corp Ord 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 Group has no effect on the direction of Vericel Corp i.e., Vericel Corp and Cronos go up and down completely randomly.

Pair Corralation between Vericel Corp and Cronos

Given the investment horizon of 90 days Vericel Corp Ord is expected to generate 0.89 times more return on investment than Cronos. However, Vericel Corp Ord is 1.12 times less risky than Cronos. It trades about 0.08 of its potential returns per unit of risk. Cronos Group is currently generating about 0.0 per unit of risk. If you would invest  2,385  in Vericel Corp Ord on September 28, 2024 and sell it today you would earn a total of  3,382  from holding Vericel Corp Ord or generate 141.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Vericel Corp Ord  vs.  Cronos Group

 Performance 
       Timeline  
Vericel Corp Ord 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Vericel Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.
Cronos Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cronos Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Vericel Corp and Cronos Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vericel Corp and Cronos

The main advantage of trading using opposite Vericel Corp and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vericel Corp 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 Vericel Corp Ord and Cronos 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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