Correlation Between Qtum and XRP
Can any of the company-specific risk be diversified away by investing in both Qtum and XRP 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 Qtum and XRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qtum and XRP, you can compare the effects of market volatilities on Qtum and XRP 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 Qtum with a short position of XRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qtum and XRP.
Diversification Opportunities for Qtum and XRP
Very poor diversification
The 3 months correlation between Qtum and XRP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Qtum and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and Qtum 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 Qtum are associated (or correlated) with XRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XRP has no effect on the direction of Qtum i.e., Qtum and XRP go up and down completely randomly.
Pair Corralation between Qtum and XRP
Assuming the 90 days trading horizon Qtum is expected to generate 1.52 times more return on investment than XRP. However, Qtum is 1.52 times more volatile than XRP. It trades about -0.05 of its potential returns per unit of risk. XRP is currently generating about -0.08 per unit of risk. If you would invest 457.00 in Qtum on January 26, 2024 and sell it today you would lose (54.00) from holding Qtum or give up 11.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qtum vs. XRP
Performance |
| Timeline |
| Qtum |
| XRP |
Qtum and XRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qtum and XRP
The main advantage of trading using opposite Qtum and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qtum position performs unexpectedly, XRP 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 XRP will offset losses from the drop in XRP's long position.The idea behind Qtum and XRP 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.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |