Correlation Between MONA and Osmosis
Can any of the company-specific risk be diversified away by investing in both MONA and Osmosis 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 Osmosis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MONA and Osmosis, you can compare the effects of market volatilities on MONA and Osmosis 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 Osmosis. Check out your portfolio center. Please also check ongoing floating volatility patterns of MONA and Osmosis.
Diversification Opportunities for MONA and Osmosis
Average diversification
The 3 months correlation between MONA and Osmosis is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MONA and Osmosis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osmosis 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 Osmosis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osmosis has no effect on the direction of MONA i.e., MONA and Osmosis go up and down completely randomly.
Pair Corralation between MONA and Osmosis
Assuming the 90 days trading horizon MONA is expected to generate 0.79 times more return on investment than Osmosis. However, MONA is 1.27 times less risky than Osmosis. It trades about -0.2 of its potential returns per unit of risk. Osmosis is currently generating about -0.29 per unit of risk. If you would invest 41.00 in MONA on January 26, 2024 and sell it today you would lose (7.00) from holding MONA or give up 17.07% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MONA vs. Osmosis
Performance |
Timeline |
MONA |
Osmosis |
MONA and Osmosis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MONA and Osmosis
The main advantage of trading using opposite MONA and Osmosis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MONA position performs unexpectedly, Osmosis 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 Osmosis will offset losses from the drop in Osmosis' long position.The idea behind MONA and Osmosis 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |