Correlation Between Quant and Monero

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

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

Diversification Opportunities for Quant and Monero

0.19

Correlation Coefficient

Quant  Monero

Average diversification

The 3 months correlation between Quant and Monero is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Quant and Monero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monero and Quant 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 Quant are associated (or correlated) with Monero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monero has no effect on the direction of Quant i.e., Quant and Monero go up and down completely randomly.

Pair Corralation between Quant and Monero

Assuming the 90 days trading horizon Quant is expected to under-perform the Monero. In addition to that, Quant is 1.27 times more volatile than Monero. It trades about -0.2 of its total potential returns per unit of risk. Monero is currently generating about -0.12 per unit of volatility. If you would invest  13,496  in Monero on January 27, 2024 and sell it today you would lose (1,396) from holding Monero or give up 10.34% of portfolio value over 90 days.

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

Quant  vs.  Monero

Quant

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quant are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Quant may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Monero

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monero has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for Monero shareholders.

Pair Trading with Quant and Monero

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

The idea behind Quant and Monero 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.