Correlation Between UBQ and Monero

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

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

Diversification Opportunities for UBQ and Monero

0.68

Correlation Coefficient

UBQ  Monero

Poor diversification

The 3 months correlation between UBQ and Monero is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding UBQ and Monero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monero and UBQ 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 UBQ 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 UBQ i.e., UBQ and Monero go up and down completely randomly.

Pair Corralation between UBQ and Monero

Assuming the 90 days trading horizon UBQ is expected to under-perform the Monero. In addition to that, UBQ is 1.81 times more volatile than Monero. It trades about -0.03 of its total potential returns per unit of risk. Monero is currently generating about 0.04 per unit of volatility. If you would invest  17,180  in Monero on October 24, 2024 and sell it today you would earn a total of  5,289  from holding Monero or generate 30.79% return on investment over 90 days.

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

UBQ  vs.  Monero

UBQ

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UBQ are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, UBQ exhibited solid returns over the last few months and may actually be approaching a breakup point.

Monero

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monero are ranked lower than 9 (%) 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 UBQ and Monero

The main advantage of trading using opposite UBQ and Monero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBQ 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 UBQ 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.