Correlation Between IOTA and Monero

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

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

Diversification Opportunities for IOTA and Monero

-0.28

Correlation Coefficient

IOTA  Monero

Very good diversification

The 3 months correlation between IOTA and Monero is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding IOTA and Monero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monero and IOTA 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 IOTA 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 IOTA i.e., IOTA and Monero go up and down completely randomly.

Pair Corralation between IOTA and Monero

Assuming the 90 days trading horizon IOTA is expected to under-perform the Monero. In addition to that, IOTA is 2.05 times more volatile than Monero. It trades about -0.13 of its total potential returns per unit of risk. Monero is currently generating about 0.07 per unit of volatility. If you would invest  19,027  in Monero on December 21, 2024 and sell it today you would earn a total of  2,087  from holding Monero or generate 10.97% return on investment over 90 days.

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

IOTA  vs.  Monero

IOTA

Risk-Adjusted Performance

Very Weak

Over the last 90 days IOTA 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 fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for IOTA shareholders.

Monero

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monero are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Monero exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IOTA and Monero

The main advantage of trading using opposite IOTA and Monero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IOTA 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 IOTA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.