Correlation Between XRP and GB Group
Can any of the company-specific risk be diversified away by investing in both XRP and GB Group 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 XRP and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and GB Group plc, you can compare the effects of market volatilities on XRP and GB Group 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 XRP with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and GB Group.
Diversification Opportunities for XRP and GB Group
Weak diversification
The 3 months correlation between XRP and 0GB is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding XRP and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and XRP 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 XRP are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of XRP i.e., XRP and GB Group go up and down completely randomly.
Pair Corralation between XRP and GB Group
Assuming the 90 days trading horizon XRP is expected to generate 3.9 times more return on investment than GB Group. However, XRP is 3.9 times more volatile than GB Group plc. It trades about 0.27 of its potential returns per unit of risk. GB Group plc is currently generating about -0.12 per unit of risk. If you would invest 232.00 in XRP on October 24, 2024 and sell it today you would earn a total of 85.00 from holding XRP or generate 36.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
XRP vs. GB Group plc
Performance |
| Timeline |
| XRP |
| GB Group plc |
XRP and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and GB Group
The main advantage of trading using opposite XRP and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.The idea behind XRP and GB Group plc 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.| GB Group vs. AGNC INVESTMENT | GB Group vs. Nishi Nippon Railroad Co | GB Group vs. WisdomTree Investments | GB Group vs. Apollo Investment Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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