Correlation Between Cronos and Medicure

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

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

Diversification Opportunities for Cronos and Medicure

0.27

Correlation Coefficient

Cronos  Medicure

Modest diversification

The 3 months correlation between Cronos and Medicure is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cronos Group and Medicure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medicure and Cronos 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 Cronos Group are associated (or correlated) with Medicure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medicure has no effect on the direction of Cronos i.e., Cronos and Medicure go up and down completely randomly.

Pair Corralation between Cronos and Medicure

Assuming the 90 days trading horizon Cronos is expected to generate 3.38 times less return on investment than Medicure. But when comparing it to its historical volatility, Cronos Group is 2.26 times less risky than Medicure. It trades about 0.11 of its potential returns per unit of risk. Medicure is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  83.00  in Medicure on April 24, 2025 and sell it today you would earn a total of  42.00  from holding Medicure or generate 50.6% return on investment over 90 days.

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

Cronos Group  vs.  Medicure

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.

Medicure

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Medicure are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Medicure showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cronos and Medicure

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

The idea behind Cronos Group and Medicure 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.