Correlation Between Bitcoin Gold and MONA
Can any of the company-specific risk be diversified away by investing in both Bitcoin Gold 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 Bitcoin Gold and MONA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin Gold and MONA, you can compare the effects of market volatilities on Bitcoin Gold 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 Bitcoin Gold with a short position of MONA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Gold and MONA.
Diversification Opportunities for Bitcoin Gold and MONA
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitcoin and MONA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Gold and MONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONA and Bitcoin Gold 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 Bitcoin Gold 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 Bitcoin Gold i.e., Bitcoin Gold and MONA go up and down completely randomly.
Pair Corralation between Bitcoin Gold and MONA
Assuming the 90 days trading horizon Bitcoin Gold is expected to generate 1.41 times more return on investment than MONA. However, Bitcoin Gold is 1.41 times more volatile than MONA. It trades about 0.12 of its potential returns per unit of risk. MONA is currently generating about -0.04 per unit of risk. If you would invest 1,336 in Bitcoin Gold on January 24, 2024 and sell it today you would earn a total of 2,112 from holding Bitcoin Gold or generate 158.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin Gold vs. MONA
Performance |
| Timeline |
| Bitcoin Gold |
| MONA |
Bitcoin Gold and MONA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin Gold and MONA
The main advantage of trading using opposite Bitcoin Gold and MONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Gold 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.| Bitcoin Gold vs. Bitcoin | Bitcoin Gold vs. Dogecoin | Bitcoin Gold vs. Bitcoin Cash | Bitcoin Gold vs. Litecoin |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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