Correlation Between XRP and Atlanticus Holdings
Can any of the company-specific risk be diversified away by investing in both XRP and Atlanticus Holdings 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 Atlanticus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Atlanticus Holdings, you can compare the effects of market volatilities on XRP and Atlanticus Holdings 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 Atlanticus Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Atlanticus Holdings.
Diversification Opportunities for XRP and Atlanticus Holdings
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between XRP and Atlanticus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings 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 Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings has no effect on the direction of XRP i.e., XRP and Atlanticus Holdings go up and down completely randomly.
Pair Corralation between XRP and Atlanticus Holdings
Assuming the 90 days trading horizon XRP is expected to generate 2.41 times more return on investment than Atlanticus Holdings. However, XRP is 2.41 times more volatile than Atlanticus Holdings. It trades about 0.34 of its potential returns per unit of risk. Atlanticus Holdings is currently generating about 0.05 per unit of risk. If you would invest 224.00 in XRP on October 21, 2024 and sell it today you would earn a total of 105.00 from holding XRP or generate 46.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 90.48% |
| Values | Daily Returns |
XRP vs. Atlanticus Holdings
Performance |
| Timeline |
| XRP |
| Atlanticus Holdings |
XRP and Atlanticus Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and Atlanticus Holdings
The main advantage of trading using opposite XRP and Atlanticus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Atlanticus Holdings 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 Atlanticus Holdings will offset losses from the drop in Atlanticus Holdings' long position.The idea behind XRP and Atlanticus Holdings 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.| Atlanticus Holdings vs. 360 Finance | Atlanticus Holdings vs. Lexinfintech Holdings | Atlanticus Holdings vs. Qudian Inc | Atlanticus Holdings vs. Enova International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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