Correlation Between MONA and Qtum
Can any of the company-specific risk be diversified away by investing in both MONA and Qtum 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 MONA and Qtum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MONA and Qtum, you can compare the effects of market volatilities on MONA and Qtum 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 MONA with a short position of Qtum. Check out your portfolio center. Please also check ongoing floating volatility patterns of MONA and Qtum.
Diversification Opportunities for MONA and Qtum
Very poor diversification
The 3 months correlation between MONA and Qtum is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding MONA and Qtum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qtum and MONA 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 MONA are associated (or correlated) with Qtum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qtum has no effect on the direction of MONA i.e., MONA and Qtum go up and down completely randomly.
Pair Corralation between MONA and Qtum
Assuming the 90 days trading horizon MONA is expected to under-perform the Qtum. But the crypto coin apears to be less risky and, when comparing its historical volatility, MONA is 1.7 times less risky than Qtum. The crypto coin trades about -0.1 of its potential returns per unit of risk. The Qtum is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 476.00 in Qtum on January 24, 2024 and sell it today you would lose (52.00) from holding Qtum or give up 10.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MONA vs. Qtum
Performance |
| Timeline |
| MONA |
| Qtum |
MONA and Qtum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MONA and Qtum
The main advantage of trading using opposite MONA and Qtum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MONA position performs unexpectedly, Qtum 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 Qtum will offset losses from the drop in Qtum's long position.The idea behind MONA and Qtum 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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