Correlation Between MONA and SEELE
Can any of the company-specific risk be diversified away by investing in both MONA and SEELE 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 SEELE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MONA and SEELE, you can compare the effects of market volatilities on MONA and SEELE 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 SEELE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MONA and SEELE.
Diversification Opportunities for MONA and SEELE
Pay attention - limited upside
The 3 months correlation between MONA and SEELE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MONA and SEELE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEELE 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 SEELE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEELE has no effect on the direction of MONA i.e., MONA and SEELE go up and down completely randomly.
Pair Corralation between MONA and SEELE
Assuming the 90 days trading horizon MONA is expected to under-perform the SEELE. But the crypto coin apears to be less risky and, when comparing its historical volatility, MONA is 31.83 times less risky than SEELE. The crypto coin trades about -0.01 of its potential returns per unit of risk. The SEELE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.68 in SEELE on January 24, 2024 and sell it today you would lose (0.68) from holding SEELE or give up 99.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 84.63% |
| Values | Daily Returns |
MONA vs. SEELE
Performance |
| Timeline |
| MONA |
| SEELE |
MONA and SEELE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MONA and SEELE
The main advantage of trading using opposite MONA and SEELE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MONA position performs unexpectedly, SEELE 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 SEELE will offset losses from the drop in SEELE's long position.The idea behind MONA and SEELE 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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