Correlation Between XRP and OFFICIAL TRUMP

Can any of the company-specific risk be diversified away by investing in both XRP and OFFICIAL TRUMP 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 OFFICIAL TRUMP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between XRP and OFFICIAL TRUMP, you can compare the effects of market volatilities on XRP and OFFICIAL TRUMP 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 OFFICIAL TRUMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and OFFICIAL TRUMP.

Diversification Opportunities for XRP and OFFICIAL TRUMP

0.79

Correlation Coefficient

XRP  OFFICIAL TRUMP

Poor diversification

The 3 months correlation between XRP and OFFICIAL is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding XRP and OFFICIAL TRUMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICIAL TRUMP 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 OFFICIAL TRUMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICIAL TRUMP has no effect on the direction of XRP i.e., XRP and OFFICIAL TRUMP go up and down completely randomly.

Pair Corralation between XRP and OFFICIAL TRUMP

Assuming the 90 days trading horizon XRP is expected to generate 0.49 times more return on investment than OFFICIAL TRUMP. However, XRP is 2.05 times less risky than OFFICIAL TRUMP. It trades about -0.02 of its potential returns per unit of risk. OFFICIAL TRUMP is currently generating about -0.02 per unit of risk. If you would invest  253.00  in XRP on February 3, 2025 and sell it today you would lose (34.00) from holding XRP or give up 13.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

XRP  vs.  OFFICIAL TRUMP

XRP

Risk-Adjusted Performance

Very Weak

Over the last 90 days XRP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, XRP is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

OFFICIAL TRUMP

Risk-Adjusted Performance

Very Weak

Over the last 90 days OFFICIAL TRUMP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for OFFICIAL TRUMP shareholders.

Pair Trading with XRP and OFFICIAL TRUMP

The main advantage of trading using opposite XRP and OFFICIAL TRUMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, OFFICIAL TRUMP 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 OFFICIAL TRUMP will offset losses from the drop in OFFICIAL TRUMP's long position.

The idea behind XRP and OFFICIAL TRUMP 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.

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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..