Correlation Between Monero and ZCash

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

Diversification Opportunities for Monero and ZCash

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Monero and ZCash is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Monero and ZCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZCash 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 ZCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZCash has no effect on the direction of Monero i.e., Monero and ZCash go up and down completely randomly.

Pair Corralation between Monero and ZCash

Assuming the 90 days trading horizon Monero is expected to generate 0.68 times more return on investment than ZCash. However, Monero is 1.48 times less risky than ZCash. It trades about -0.01 of its potential returns per unit of risk. ZCash is currently generating about -0.03 per unit of risk. If you would invest  14,933  in Monero on September 3, 2022 and sell it today you would lose (589.00)  from holding Monero or give up 3.94% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Monero  vs.  ZCash

 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

ZCash 
ZCash Performance
0 of 100
Over the last 90 days ZCash 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 technical and fundamental 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 ZCash investors.

ZCash Price Channel

Monero and ZCash Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Monero and ZCash

The main advantage of trading using opposite Monero and ZCash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monero position performs unexpectedly, ZCash 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 ZCash will offset losses from the drop in ZCash's long position.
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The idea behind Monero and ZCash 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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ZCash vs. Monero
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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