Correlation Between XRP and De Grey
Can any of the company-specific risk be diversified away by investing in both XRP and De Grey 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 De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and De Grey Mining, you can compare the effects of market volatilities on XRP and De Grey 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 De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and De Grey.
Diversification Opportunities for XRP and De Grey
Very poor diversification
The 3 months correlation between XRP and DGD is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding XRP and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining 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 De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of XRP i.e., XRP and De Grey go up and down completely randomly.
Pair Corralation between XRP and De Grey
Assuming the 90 days trading horizon XRP is expected to generate 2.15 times more return on investment than De Grey. However, XRP is 2.15 times more volatile than De Grey Mining. It trades about 0.12 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.02 per unit of risk. If you would invest 40.00 in XRP on October 11, 2024 and sell it today you would earn a total of 198.00 from holding XRP or generate 495.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 59.4% |
| Values | Daily Returns |
XRP vs. De Grey Mining
Performance |
| Timeline |
| XRP |
| De Grey Mining |
XRP and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and De Grey
The main advantage of trading using opposite XRP and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.The idea behind XRP and De Grey Mining 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.| De Grey vs. CarsalesCom | De Grey vs. KENEDIX OFFICE INV | De Grey vs. ADRIATIC METALS LS 013355 | De Grey vs. ARDAGH METAL PACDL 0001 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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