Correlation Between BOEING CDR and Cronos

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

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

Diversification Opportunities for BOEING CDR and Cronos

0.71

Correlation Coefficient

BOEING CDR  Cronos

Poor diversification

The 3 months correlation between BOEING and Cronos is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BOEING CDR and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and BOEING CDR 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 BOEING CDR 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 BOEING CDR i.e., BOEING CDR and Cronos go up and down completely randomly.

Pair Corralation between BOEING CDR and Cronos

Assuming the 90 days trading horizon BOEING CDR is expected to generate 0.79 times more return on investment than Cronos. However, BOEING CDR is 1.27 times less risky than Cronos. It trades about 0.25 of its potential returns per unit of risk. Cronos Group is currently generating about 0.11 per unit of risk. If you would invest  3,033  in BOEING CDR on April 24, 2025 and sell it today you would earn a total of  854.00  from holding BOEING CDR or generate 28.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

BOEING CDR  vs.  Cronos Group

BOEING CDR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BOEING CDR are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BOEING CDR displayed solid returns over the last few months and may actually be approaching a breakup point.

Cronos Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cronos Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Cronos displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BOEING CDR and Cronos

The main advantage of trading using opposite BOEING CDR and Cronos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOEING CDR 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 BOEING CDR 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.