Correlation Between BLK and MONA

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

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

Diversification Opportunities for BLK and MONA

-0.57

Correlation Coefficient

BLK  MONA

Excellent diversification

The 3 months correlation between BLK and MONA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BLK and MONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONA and BLK 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 BLK 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 BLK i.e., BLK and MONA go up and down completely randomly.

Pair Corralation between BLK and MONA

Assuming the 90 days trading horizon BLK is expected to generate 0.65 times more return on investment than MONA. However, BLK is 1.53 times less risky than MONA. It trades about 0.09 of its potential returns per unit of risk. MONA is currently generating about -0.02 per unit of risk. If you would invest  1.92  in BLK on April 13, 2025 and sell it today you would earn a total of  1.61  from holding BLK or generate 83.85% return on investment over 90 days.

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

BLK  vs.  MONA

BLK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BLK are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, BLK 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 BLK and MONA

The main advantage of trading using opposite BLK and MONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLK 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 BLK 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.