Correlation Between XRP and First Guaranty
Can any of the company-specific risk be diversified away by investing in both XRP and First Guaranty 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 First Guaranty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and First Guaranty Bancshares, you can compare the effects of market volatilities on XRP and First Guaranty 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 First Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and First Guaranty.
Diversification Opportunities for XRP and First Guaranty
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between XRP and First is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding XRP and First Guaranty Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Guaranty Bancshares 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 First Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Guaranty Bancshares has no effect on the direction of XRP i.e., XRP and First Guaranty go up and down completely randomly.
Pair Corralation between XRP and First Guaranty
Assuming the 90 days trading horizon XRP is expected to generate 4.52 times more return on investment than First Guaranty. However, XRP is 4.52 times more volatile than First Guaranty Bancshares. It trades about 0.27 of its potential returns per unit of risk. First Guaranty Bancshares is currently generating about 0.07 per unit of risk. If you would invest 56.00 in XRP on November 2, 2024 and sell it today you would earn a total of 257.00 from holding XRP or generate 458.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.26% |
| Values | Daily Returns |
XRP vs. First Guaranty Bancshares
Performance |
| Timeline |
| XRP |
| First Guaranty Bancshares |
XRP and First Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and First Guaranty
The main advantage of trading using opposite XRP and First Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, First Guaranty 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 First Guaranty will offset losses from the drop in First Guaranty's long position.The idea behind XRP and First Guaranty Bancshares 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.| First Guaranty vs. CNB Financial | First Guaranty vs. First Citizens BancShares | First Guaranty vs. Texas Capital Bancshares | First Guaranty vs. Merchants Bancorp |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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