Correlation Between Monero and TRON

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

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

Diversification Opportunities for Monero and TRON

-0.11

Correlation Coefficient

Monero  TRON

Good diversification

The 3 months correlation between Monero and TRON is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Monero and TRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRON 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 TRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRON has no effect on the direction of Monero i.e., Monero and TRON go up and down completely randomly.

Pair Corralation between Monero and TRON

Assuming the 90 days trading horizon Monero is expected to generate 0.85 times more return on investment than TRON. However, Monero is 1.17 times less risky than TRON. It trades about 0.08 of its potential returns per unit of risk. TRON is currently generating about -0.02 per unit of risk. If you would invest  19,320  in Monero on December 29, 2024 and sell it today you would earn a total of  2,467  from holding Monero or generate 12.77% return on investment over 90 days.

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

Monero  vs.  TRON

Monero

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monero are ranked lower than 6 (%) 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.

TRON

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TRON is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Monero and TRON

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

The idea behind Monero and TRON 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.