Correlation Between Xp and Applied Blockchain
Can any of the company-specific risk be diversified away by investing in both Xp and Applied Blockchain 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 Xp and Applied Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Applied Blockchain, you can compare the effects of market volatilities on Xp and Applied Blockchain 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 Xp with a short position of Applied Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Applied Blockchain.
Diversification Opportunities for Xp and Applied Blockchain
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and Applied is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Applied Blockchain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Blockchain and Xp 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 Xp Inc are associated (or correlated) with Applied Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Blockchain has no effect on the direction of Xp i.e., Xp and Applied Blockchain go up and down completely randomly.
Pair Corralation between Xp and Applied Blockchain
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Applied Blockchain. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 2.94 times less risky than Applied Blockchain. The stock trades about -0.23 of its potential returns per unit of risk. The Applied Blockchain is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 827.00 in Applied Blockchain on August 28, 2024 and sell it today you would earn a total of 223.00 from holding Applied Blockchain or generate 26.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. Applied Blockchain
Performance |
| Timeline |
| Xp Inc |
| Applied Blockchain |
Xp and Applied Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Applied Blockchain
The main advantage of trading using opposite Xp and Applied Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, Applied Blockchain 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 Applied Blockchain will offset losses from the drop in Applied Blockchain's long position.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
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 CEOs Directory module to screen CEOs from public companies around the world.
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