Correlation Between XRP and Sun Peak
Can any of the company-specific risk be diversified away by investing in both XRP and Sun Peak 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 Sun Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Sun Peak Metals, you can compare the effects of market volatilities on XRP and Sun Peak 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 Sun Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Sun Peak.
Diversification Opportunities for XRP and Sun Peak
Pay attention - limited upside
The 3 months correlation between XRP and Sun is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Sun Peak Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Peak Metals 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 Sun Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Peak Metals has no effect on the direction of XRP i.e., XRP and Sun Peak go up and down completely randomly.
Pair Corralation between XRP and Sun Peak
Assuming the 90 days trading horizon XRP is expected to generate 1.06 times more return on investment than Sun Peak. However, XRP is 1.06 times more volatile than Sun Peak Metals. It trades about 0.22 of its potential returns per unit of risk. Sun Peak Metals is currently generating about 0.04 per unit of risk. If you would invest 63.00 in XRP on October 25, 2024 and sell it today you would earn a total of 254.00 from holding XRP or generate 403.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.06% |
| Values | Daily Returns |
XRP vs. Sun Peak Metals
Performance |
| Timeline |
| XRP |
| Sun Peak Metals |
XRP and Sun Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and Sun Peak
The main advantage of trading using opposite XRP and Sun Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Sun Peak 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 Sun Peak will offset losses from the drop in Sun Peak's long position.The idea behind XRP and Sun Peak Metals 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.| Sun Peak vs. Oncolytics Biotech | Sun Peak vs. Vizsla Silver Corp | Sun Peak vs. Aya Gold Silver | Sun Peak vs. Air Canada |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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