Correlation Between Bitget Token and XRP
Can any of the company-specific risk be diversified away by investing in both Bitget Token and XRP 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 Bitget Token and XRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitget token and XRP, you can compare the effects of market volatilities on Bitget Token and XRP 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 Bitget Token with a short position of XRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitget Token and XRP.
Diversification Opportunities for Bitget Token and XRP
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bitget and XRP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bitget token and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and Bitget Token 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 Bitget token are associated (or correlated) with XRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XRP has no effect on the direction of Bitget Token i.e., Bitget Token and XRP go up and down completely randomly.
Pair Corralation between Bitget Token and XRP
Assuming the 90 days trading horizon Bitget Token is expected to generate 4.72 times less return on investment than XRP. But when comparing it to its historical volatility, Bitget token is 2.99 times less risky than XRP. It trades about 0.45 of its potential returns per unit of risk. XRP is currently generating about 0.7 of returns per unit of risk over similar time horizon. If you would invest 51.00 in XRP on September 5, 2024 and sell it today you would earn a total of 182.00 from holding XRP or generate 356.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitget token vs. XRP
Performance |
| Timeline |
| Bitget token |
| XRP |
Bitget Token and XRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitget Token and XRP
The main advantage of trading using opposite Bitget Token and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitget Token position performs unexpectedly, XRP 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 XRP will offset losses from the drop in XRP's long position.The idea behind Bitget token and XRP 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.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 the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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