Correlation Between XRP and Hoist Finance
Can any of the company-specific risk be diversified away by investing in both XRP and Hoist Finance 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 Hoist Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Hoist Finance AB, you can compare the effects of market volatilities on XRP and Hoist Finance 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 Hoist Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Hoist Finance.
Diversification Opportunities for XRP and Hoist Finance
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XRP and Hoist is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB 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 Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of XRP i.e., XRP and Hoist Finance go up and down completely randomly.
Pair Corralation between XRP and Hoist Finance
Assuming the 90 days trading horizon XRP is expected to generate 2.13 times more return on investment than Hoist Finance. However, XRP is 2.13 times more volatile than Hoist Finance AB. It trades about 0.09 of its potential returns per unit of risk. Hoist Finance AB is currently generating about -0.04 per unit of risk. If you would invest 240.00 in XRP on October 14, 2024 and sell it today you would earn a total of 18.00 from holding XRP or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
XRP vs. Hoist Finance AB
Performance |
| Timeline |
| XRP |
| Hoist Finance AB |
XRP and Hoist Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and Hoist Finance
The main advantage of trading using opposite XRP and Hoist Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Hoist Finance 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 Hoist Finance will offset losses from the drop in Hoist Finance's long position.The idea behind XRP and Hoist Finance AB 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.| Hoist Finance vs. FIRST SAVINGS FINL | Hoist Finance vs. NetSol Technologies | Hoist Finance vs. Digilife Technologies Limited | Hoist Finance vs. CHRYSALIS INVESTMENTS LTD |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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