Correlation Between Xp and CleanSpark

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

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

Diversification Opportunities for Xp and CleanSpark

-0.63

Correlation Coefficient

Xp  CleanSpark

Excellent diversification

The 3 months correlation between Xp and CleanSpark is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and CleanSpark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanSpark and Xp 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 Xp Inc are associated (or correlated) with CleanSpark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanSpark has no effect on the direction of Xp i.e., Xp and CleanSpark go up and down completely randomly.

Pair Corralation between Xp and CleanSpark

Allowing for the 90-day total investment horizon Xp Inc is expected to generate 0.44 times more return on investment than CleanSpark. However, Xp Inc is 2.29 times less risky than CleanSpark. It trades about 0.16 of its potential returns per unit of risk. CleanSpark is currently generating about -0.03 per unit of risk. If you would invest  1,178  in Xp Inc on December 28, 2024 and sell it today you would earn a total of  289.00  from holding Xp Inc or generate 24.53% return on investment over 90 days.

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

Xp Inc  vs.  CleanSpark

Xp Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Xp Inc are ranked lower than 12 (%) 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.

CleanSpark

Risk-Adjusted Performance

Very Weak

Over the last 90 days CleanSpark has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Xp and CleanSpark

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

The idea behind Xp Inc and CleanSpark 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.