Correlation Between XRP and WESTERN COPPER

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

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

Diversification Opportunities for XRP and WESTERN COPPER

-0.27

Correlation Coefficient

XRP  WESTERN COPPER

Very good diversification

The 3 months correlation between XRP and WESTERN is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding XRP and WESTERN PER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN COPPER 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 WESTERN COPPER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN COPPER has no effect on the direction of XRP i.e., XRP and WESTERN COPPER go up and down completely randomly.

Pair Corralation between XRP and WESTERN COPPER

Assuming the 90 days trading horizon XRP is expected to generate 2.64 times more return on investment than WESTERN COPPER. However, XRP is 2.64 times more volatile than WESTERN PER. It trades about 0.04 of its potential returns per unit of risk. WESTERN PER is currently generating about 0.04 per unit of risk. If you would invest  232.00  in XRP on December 21, 2024 and sell it today you would earn a total of  10.00  from holding XRP or generate 4.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.19%
Values	Daily Returns

XRP  vs.  WESTERN PER

XRP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 3 (%) 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.

WESTERN COPPER

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WESTERN PER are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, WESTERN COPPER is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with XRP and WESTERN COPPER

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

The idea behind XRP and WESTERN PER 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.