Correlation Between Xp and Terawulf
Can any of the company-specific risk be diversified away by investing in both Xp and Terawulf 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 Terawulf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Terawulf, you can compare the effects of market volatilities on Xp and Terawulf 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 Terawulf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Terawulf.
Diversification Opportunities for Xp and Terawulf
Excellent diversification
The 3 months correlation between Xp and Terawulf is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Terawulf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terawulf 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 Terawulf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terawulf has no effect on the direction of Xp i.e., Xp and Terawulf go up and down completely randomly.
Pair Corralation between Xp and Terawulf
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Terawulf. But the stock apears to be less risky and, when comparing its historical volatility, Xp Inc is 3.09 times less risky than Terawulf. The stock trades about -0.07 of its potential returns per unit of risk. The Terawulf is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 167.00 in Terawulf on August 28, 2024 and sell it today you would earn a total of 532.00 from holding Terawulf or generate 318.56% 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. Terawulf
Performance |
| Timeline |
| Xp Inc |
| Terawulf |
Xp and Terawulf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Terawulf
The main advantage of trading using opposite Xp and Terawulf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, Terawulf 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 Terawulf will offset losses from the drop in Terawulf's long position.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
| Terawulf vs. PowerUp Acquisition Corp | Terawulf vs. Aurora Innovation | Terawulf vs. HUMANA INC | Terawulf vs. Aquagold International |
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 Stocks Directory module to find actively traded stocks across global markets.
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