Correlation Between XRP and ANT
Can any of the company-specific risk be diversified away by investing in both XRP and ANT 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 ANT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and ANT, you can compare the effects of market volatilities on XRP and ANT 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 ANT. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and ANT.
Diversification Opportunities for XRP and ANT
Very good diversification
The 3 months correlation between XRP and ANT is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding XRP and ANT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANT 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 ANT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANT has no effect on the direction of XRP i.e., XRP and ANT go up and down completely randomly.
Pair Corralation between XRP and ANT
Assuming the 90 days trading horizon XRP is expected to generate 9.63 times less return on investment than ANT. But when comparing it to its historical volatility, XRP is 3.35 times less risky than ANT. It trades about 0.03 of its potential returns per unit of risk. ANT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 145.00 in ANT on October 10, 2024 and sell it today you would earn a total of 2.00 from holding ANT or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XRP vs. ANT
Performance |
| Timeline |
| XRP |
| ANT |
XRP and ANT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and ANT
The main advantage of trading using opposite XRP and ANT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, ANT 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 ANT will offset losses from the drop in ANT's long position.The idea behind XRP and ANT 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.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |