Correlation Between Monero and IOTA

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Can any of the company-specific risk be diversified away by investing in both Monero and IOTA 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 Monero and IOTA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monero and IOTA, you can compare the effects of market volatilities on Monero and IOTA 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 Monero with a short position of IOTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monero and IOTA.

Diversification Opportunities for Monero and IOTA

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Monero and IOTA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Monero and IOTA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IOTA and Monero 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 Monero are associated (or correlated) with IOTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IOTA has no effect on the direction of Monero i.e., Monero and IOTA go up and down completely randomly.

Pair Corralation between Monero and IOTA

Assuming the 90 days trading horizon Monero is expected to generate 0.9 times more return on investment than IOTA. However, Monero is 1.11 times less risky than IOTA. It trades about -0.06 of its potential returns per unit of risk. IOTA is currently generating about -0.18 per unit of risk. If you would invest  15,851  in Monero on September 4, 2022 and sell it today you would lose (1,315)  from holding Monero or give up 8.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Monero  vs.  IOTA

 Performance (%) 
       Timeline  
Monero 
Monero Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Monero are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Monero is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Monero Price Channel

IOTA 
IOTA Performance
0 of 100
Over the last 90 days IOTA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long term up-swing for IOTA investors.

IOTA Price Channel

Monero and IOTA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Monero and IOTA

The main advantage of trading using opposite Monero and IOTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monero position performs unexpectedly, IOTA 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 IOTA will offset losses from the drop in IOTA's long position.
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The idea behind Monero and IOTA 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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Check out your portfolio center. 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 Probability Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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