Correlation Between MONA and DAT

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

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

Diversification Opportunities for MONA and DAT

-0.05

Correlation Coefficient

MONA  DAT

Good diversification

The 3 months correlation between MONA and DAT is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding MONA and DAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAT 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 DAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAT has no effect on the direction of MONA i.e., MONA and DAT go up and down completely randomly.

Pair Corralation between MONA and DAT

If you would invest  0.00  in DAT on January 29, 2024 and sell it today you would earn a total of  0.00  from holding DAT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

MONA  vs.  DAT

MONA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MONA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, MONA is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DAT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DAT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, DAT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MONA and DAT

The main advantage of trading using opposite MONA and DAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MONA position performs unexpectedly, DAT 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 DAT will offset losses from the drop in DAT's long position.

The idea behind MONA and DAT 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 CEOs Directory module to screen CEOs from public companies around the world.