Correlation Between XRP and Apax Global
Can any of the company-specific risk be diversified away by investing in both XRP and Apax Global 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 Apax Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Apax Global Alpha, you can compare the effects of market volatilities on XRP and Apax Global 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 Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Apax Global.
Diversification Opportunities for XRP and Apax Global
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XRP and Apax is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha 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 Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of XRP i.e., XRP and Apax Global go up and down completely randomly.
Pair Corralation between XRP and Apax Global
Assuming the 90 days trading horizon XRP is expected to generate 4.8 times more return on investment than Apax Global. However, XRP is 4.8 times more volatile than Apax Global Alpha. It trades about 0.13 of its potential returns per unit of risk. Apax Global Alpha is currently generating about -0.01 per unit of risk. If you would invest 38.00 in XRP on November 2, 2024 and sell it today you would earn a total of 275.00 from holding XRP or generate 723.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.84% |
| Values | Daily Returns |
XRP vs. Apax Global Alpha
Performance |
| Timeline |
| XRP |
| Apax Global Alpha |
XRP and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and Apax Global
The main advantage of trading using opposite XRP and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Apax Global 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 Apax Global will offset losses from the drop in Apax Global's long position.The idea behind XRP and Apax Global Alpha 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.| Apax Global vs. CVS Health Corp | Apax Global vs. Inspiration Healthcare Group | Apax Global vs. Universal Health Services | Apax Global vs. National Beverage 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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