Correlation Between XRP and Paragon Banking
Can any of the company-specific risk be diversified away by investing in both XRP and Paragon Banking 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 Paragon Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Paragon Banking Group, you can compare the effects of market volatilities on XRP and Paragon Banking 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 Paragon Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Paragon Banking.
Diversification Opportunities for XRP and Paragon Banking
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XRP and Paragon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Paragon Banking Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon Banking Group 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 Paragon Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon Banking Group has no effect on the direction of XRP i.e., XRP and Paragon Banking go up and down completely randomly.
Pair Corralation between XRP and Paragon Banking
Assuming the 90 days trading horizon XRP is expected to generate 2.67 times more return on investment than Paragon Banking. However, XRP is 2.67 times more volatile than Paragon Banking Group. It trades about 0.32 of its potential returns per unit of risk. Paragon Banking Group is currently generating about 0.05 per unit of risk. If you would invest 218.00 in XRP on October 28, 2024 and sell it today you would earn a total of 93.00 from holding XRP or generate 42.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
XRP vs. Paragon Banking Group
Performance |
| Timeline |
| XRP |
| Paragon Banking Group |
XRP and Paragon Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and Paragon Banking
The main advantage of trading using opposite XRP and Paragon Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Paragon Banking 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 Paragon Banking will offset losses from the drop in Paragon Banking's long position.The idea behind XRP and Paragon Banking Group 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.| Paragon Banking vs. Carsales | Paragon Banking vs. Verizon Communications | Paragon Banking vs. TRADELINK ELECTRON | Paragon Banking vs. Ribbon Communications |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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