Correlation Between MONA and Staked Ether

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

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

Diversification Opportunities for MONA and Staked Ether

0.83

Correlation Coefficient

MONA  Staked Ether

Very poor diversification

The 3 months correlation between MONA and Staked is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MONA and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether 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 Staked Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staked Ether has no effect on the direction of MONA i.e., MONA and Staked Ether go up and down completely randomly.

Pair Corralation between MONA and Staked Ether

Assuming the 90 days trading horizon MONA is expected to under-perform the Staked Ether. In addition to that, MONA is 1.21 times more volatile than Staked Ether. It trades about -0.16 of its total potential returns per unit of risk. Staked Ether is currently generating about -0.08 per unit of volatility. If you would invest  349,634  in Staked Ether on January 29, 2024 and sell it today you would lose (24,636) from holding Staked Ether or give up 7.05% of portfolio value over 90 days.

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

MONA  vs.  Staked Ether

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.

Staked Ether

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Staked Ether are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Staked Ether exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MONA and Staked Ether

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

The idea behind MONA and Staked Ether 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.