Correlation Between Bitcoin Cash and MONA

Can any of the company-specific risk be diversified away by investing in both Bitcoin Cash 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 Cash and MONA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bitcoin Cash and MONA, you can compare the effects of market volatilities on Bitcoin Cash 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 Cash with a short position of MONA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin Cash and MONA.

Diversification Opportunities for Bitcoin Cash and MONA

-0.78

Correlation Coefficient

Bitcoin Cash  MONA

Pay attention - limited upside

The 3 months correlation between Bitcoin and MONA is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Cash and MONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONA and Bitcoin Cash 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 Cash 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 Cash i.e., Bitcoin Cash and MONA go up and down completely randomly.

Pair Corralation between Bitcoin Cash and MONA

Assuming the 90 days trading horizon Bitcoin Cash is expected to generate 2.49 times less return on investment than MONA. But when comparing it to its historical volatility, Bitcoin Cash is 2.25 times less risky than MONA. It trades about 0.15 of its potential returns per unit of risk. MONA is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  15.00  in MONA on April 20, 2025 and sell it today you would earn a total of  3.00  from holding MONA or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bitcoin Cash  vs.  MONA

Bitcoin Cash

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Cash are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Bitcoin Cash exhibited solid returns over the last few months and may actually be approaching a breakup point.

MONA

Risk-Adjusted Performance

Very Weak

Over the last 90 days MONA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for MONA shareholders.

Pair Trading with Bitcoin Cash and MONA

The main advantage of trading using opposite Bitcoin Cash and MONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Cash 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.

The idea behind Bitcoin Cash and MONA 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.