Correlation Between MANTRA and Venus

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

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

Diversification Opportunities for MANTRA and Venus

-0.39

Correlation Coefficient

MANTRA  Venus

Very good diversification

The 3 months correlation between MANTRA and Venus is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MANTRA and Venus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Venus and MANTRA 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 MANTRA are associated (or correlated) with Venus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Venus has no effect on the direction of MANTRA i.e., MANTRA and Venus go up and down completely randomly.

Pair Corralation between MANTRA and Venus

Assuming the 90 days horizon MANTRA is expected to generate 0.84 times more return on investment than Venus. However, MANTRA is 1.2 times less risky than Venus. It trades about 0.16 of its potential returns per unit of risk. Venus is currently generating about -0.09 per unit of risk. If you would invest  386.00  in MANTRA on January 4, 2025 and sell it today you would earn a total of  254.00  from holding MANTRA or generate 65.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MANTRA  vs.  Venus

MANTRA

Risk-Adjusted Performance

Good

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

Venus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Venus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for Venus shareholders.

Pair Trading with MANTRA and Venus

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

The idea behind MANTRA and Venus 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .