Correlation Between XRP and BK Variable

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

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

Diversification Opportunities for XRP and BK Variable

0.8

Correlation Coefficient

XRP  BK Variable

Very poor diversification

The 3 months correlation between XRP and 0P0000120T is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding XRP and BK Variable Internacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Variable Internacional 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 BK Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Variable Internacional has no effect on the direction of XRP i.e., XRP and BK Variable go up and down completely randomly.

Pair Corralation between XRP and BK Variable

Assuming the 90 days trading horizon XRP is expected to generate 10.15 times more return on investment than BK Variable. However, XRP is 10.15 times more volatile than BK Variable Internacional. It trades about 0.38 of its potential returns per unit of risk. BK Variable Internacional is currently generating about 0.13 per unit of risk. If you would invest  53.00  in XRP on October 27, 2024 and sell it today you would earn a total of  258.00  from holding XRP or generate 486.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

XRP  vs.  BK Variable Internacional

XRP

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, XRP exhibited solid returns over the last few months and may actually be approaching a breakup point.

BK Variable Internacional

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BK Variable Internacional are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, BK Variable may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with XRP and BK Variable

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

The idea behind XRP and BK Variable Internacional 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 Stocks Directory module to find actively traded stocks across global markets.