Correlation Between Wrapped Beacon and XRP
Can any of the company-specific risk be diversified away by investing in both Wrapped Beacon 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 Wrapped Beacon and XRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wrapped Beacon ETH and XRP, you can compare the effects of market volatilities on Wrapped Beacon 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 Wrapped Beacon with a short position of XRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wrapped Beacon and XRP.
Diversification Opportunities for Wrapped Beacon and XRP
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wrapped and XRP is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Wrapped Beacon ETH and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and Wrapped Beacon 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 Wrapped Beacon ETH 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 Wrapped Beacon i.e., Wrapped Beacon and XRP go up and down completely randomly.
Pair Corralation between Wrapped Beacon and XRP
Assuming the 90 days trading horizon Wrapped Beacon is expected to generate 3.47 times less return on investment than XRP. But when comparing it to its historical volatility, Wrapped Beacon ETH is 2.05 times less risky than XRP. It trades about 0.43 of its potential returns per unit of risk. XRP is currently generating about 0.73 of returns per unit of risk over similar time horizon. If you would invest 51.00 in XRP on September 2, 2024 and sell it today you would earn a total of 144.00 from holding XRP or generate 282.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wrapped Beacon ETH vs. XRP
Performance |
| Timeline |
| Wrapped Beacon ETH |
| XRP |
Wrapped Beacon and XRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wrapped Beacon and XRP
The main advantage of trading using opposite Wrapped Beacon and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wrapped Beacon 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.| Wrapped Beacon vs. Wrapped eETH | Wrapped Beacon vs. Staked Ether | Wrapped Beacon vs. EigenLayer | Wrapped Beacon vs. EOSDAC |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |