Correlation Between 0x and MONA
Can any of the company-specific risk be diversified away by investing in both 0x and MONA 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 0x and MONA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 0x and MONA, you can compare the effects of market volatilities on 0x and MONA 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 0x with a short position of MONA. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and MONA.
Diversification Opportunities for 0x and MONA
Very weak diversification
The 3 months correlation between 0x and MONA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding 0x and MONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONA and 0x 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 0x are associated (or correlated) with MONA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONA has no effect on the direction of 0x i.e., 0x and MONA go up and down completely randomly.
Pair Corralation between 0x and MONA
Assuming the 90 days trading horizon 0x is expected to generate 1.57 times more return on investment than MONA. However, 0x is 1.57 times more volatile than MONA. It trades about 0.03 of its potential returns per unit of risk. MONA is currently generating about -0.01 per unit of risk. If you would invest 72.00 in 0x on January 24, 2024 and sell it today you would lose (16.00) from holding 0x or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
0x vs. MONA
Performance |
| Timeline |
| 0x |
| MONA |
0x and MONA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 0x and MONA
The main advantage of trading using opposite 0x and MONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, MONA 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 MONA will offset losses from the drop in MONA's long position.The idea behind 0x and MONA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance |