Correlation Between Xp and Bitcoin Depot
Can any of the company-specific risk be diversified away by investing in both Xp and Bitcoin Depot 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 Bitcoin Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Bitcoin Depot, you can compare the effects of market volatilities on Xp and Bitcoin Depot 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 Bitcoin Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Bitcoin Depot.
Diversification Opportunities for Xp and Bitcoin Depot
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and Bitcoin is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Xp i.e., Xp and Bitcoin Depot go up and down completely randomly.
Pair Corralation between Xp and Bitcoin Depot
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Bitcoin Depot. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 7.49 times less risky than Bitcoin Depot. The stock trades about -0.23 of its potential returns per unit of risk. The Bitcoin Depot is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5.23 in Bitcoin Depot on August 28, 2024 and sell it today you would earn a total of 3.75 from holding Bitcoin Depot or generate 71.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. Bitcoin Depot
Performance |
| Timeline |
| Xp Inc |
| Bitcoin Depot |
Xp and Bitcoin Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Bitcoin Depot
The main advantage of trading using opposite Xp and Bitcoin Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, Bitcoin Depot 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 Bitcoin Depot will offset losses from the drop in Bitcoin Depot's long position.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| Bitcoin Depot vs. LENSAR Inc | Bitcoin Depot vs. Getty Realty | Bitcoin Depot vs. Cumberland Pharmaceuticals | Bitcoin Depot vs. Cedar Realty Trust |
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.
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