Correlation Between Hut 8 and Xp

Can any of the company-specific risk be diversified away by investing in both Hut 8 and Xp 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 Hut 8 and Xp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hut 8 Corp and Xp Inc, you can compare the effects of market volatilities on Hut 8 and Xp 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 Hut 8 with a short position of Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hut 8 and Xp.

Diversification Opportunities for Hut 8 and Xp

-0.8

Correlation Coefficient

Hut 8  Xp

Pay attention - limited upside

The 3 months correlation between Hut and Xp is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hut 8 Corp and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc and Hut 8 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 Hut 8 Corp are associated (or correlated) with Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Hut 8 i.e., Hut 8 and Xp go up and down completely randomly.

Pair Corralation between Hut 8 and Xp

Considering the 90-day investment horizon Hut 8 Corp is expected to under-perform the Xp. In addition to that, Hut 8 is 2.34 times more volatile than Xp Inc. It trades about -0.12 of its total potential returns per unit of risk. Xp Inc is currently generating about 0.14 per unit of volatility. If you would invest  1,212  in Xp Inc on December 24, 2024 and sell it today you would earn a total of  262.00  from holding Xp Inc or generate 21.62% return on investment over 90 days.

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

Hut 8 Corp  vs.  Xp Inc

Hut 8 Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hut 8 Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Xp Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xp Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Xp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hut 8 and Xp

The main advantage of trading using opposite Hut 8 and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hut 8 position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.

The idea behind Hut 8 Corp and Xp Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.