Correlation Between MONA and NEXO
Can any of the company-specific risk be diversified away by investing in both MONA and NEXO 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 NEXO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MONA and NEXO, you can compare the effects of market volatilities on MONA and NEXO 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 NEXO. Check out your portfolio center. Please also check ongoing floating volatility patterns of MONA and NEXO.
Diversification Opportunities for MONA and NEXO
Very poor diversification
The 3 months correlation between MONA and NEXO is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding MONA and NEXO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXO 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 NEXO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXO has no effect on the direction of MONA i.e., MONA and NEXO go up and down completely randomly.
Pair Corralation between MONA and NEXO
Assuming the 90 days trading horizon MONA is expected to under-perform the NEXO. In addition to that, MONA is 1.14 times more volatile than NEXO. It trades about -0.16 of its total potential returns per unit of risk. NEXO is currently generating about -0.1 per unit of volatility. If you would invest 139.00 in NEXO on January 25, 2024 and sell it today you would lose (12.00) from holding NEXO or give up 8.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
MONA vs. NEXO
Performance |
| Timeline |
| MONA |
| NEXO |
MONA and NEXO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MONA and NEXO
The main advantage of trading using opposite MONA and NEXO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MONA position performs unexpectedly, NEXO 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 NEXO will offset losses from the drop in NEXO's long position.The idea behind MONA and NEXO 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |