Correlation Between XRP and Shenzhen Hans

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

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

Diversification Opportunities for XRP and Shenzhen Hans

-0.49

Correlation Coefficient

XRP  Shenzhen Hans

Very good diversification

The 3 months correlation between XRP and Shenzhen is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Shenzhen Hans CNC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Hans CNC 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 Shenzhen Hans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Hans CNC has no effect on the direction of XRP i.e., XRP and Shenzhen Hans go up and down completely randomly.

Pair Corralation between XRP and Shenzhen Hans

Assuming the 90 days trading horizon XRP is expected to generate 1.17 times less return on investment than Shenzhen Hans. In addition to that, XRP is 2.16 times more volatile than Shenzhen Hans CNC. It trades about 0.03 of its total potential returns per unit of risk. Shenzhen Hans CNC is currently generating about 0.08 per unit of volatility. If you would invest  3,708  in Shenzhen Hans CNC on December 22, 2024 and sell it today you would earn a total of  411.00  from holding Shenzhen Hans CNC or generate 11.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.77%
Values	Daily Returns

XRP  vs.  Shenzhen Hans CNC

XRP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, XRP may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Shenzhen Hans CNC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Hans CNC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Hans sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XRP and Shenzhen Hans

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

The idea behind XRP and Shenzhen Hans CNC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.