Correlation Between XRP and ELLINGTON RESIDMTG
Can any of the company-specific risk be diversified away by investing in both XRP and ELLINGTON RESIDMTG 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 ELLINGTON RESIDMTG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and ELLINGTON RESIDMTG SBI, you can compare the effects of market volatilities on XRP and ELLINGTON RESIDMTG 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 ELLINGTON RESIDMTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and ELLINGTON RESIDMTG.
Diversification Opportunities for XRP and ELLINGTON RESIDMTG
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between XRP and ELLINGTON is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding XRP and ELLINGTON RESIDMTG SBI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELLINGTON RESIDMTG SBI 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 ELLINGTON RESIDMTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELLINGTON RESIDMTG SBI has no effect on the direction of XRP i.e., XRP and ELLINGTON RESIDMTG go up and down completely randomly.
Pair Corralation between XRP and ELLINGTON RESIDMTG
Assuming the 90 days trading horizon XRP is expected to under-perform the ELLINGTON RESIDMTG. In addition to that, XRP is 2.87 times more volatile than ELLINGTON RESIDMTG SBI. It trades about -0.01 of its total potential returns per unit of risk. ELLINGTON RESIDMTG SBI is currently generating about 0.02 per unit of volatility. If you would invest 637.00 in ELLINGTON RESIDMTG SBI on October 10, 2024 and sell it today you would earn a total of 3.00 from holding ELLINGTON RESIDMTG SBI or generate 0.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 80.95% |
Values | Daily Returns |
XRP vs. ELLINGTON RESIDMTG SBI
Performance |
Timeline |
XRP |
ELLINGTON RESIDMTG SBI |
XRP and ELLINGTON RESIDMTG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XRP and ELLINGTON RESIDMTG
The main advantage of trading using opposite XRP and ELLINGTON RESIDMTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, ELLINGTON RESIDMTG 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 ELLINGTON RESIDMTG will offset losses from the drop in ELLINGTON RESIDMTG's long position.The idea behind XRP and ELLINGTON RESIDMTG SBI 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.ELLINGTON RESIDMTG vs. Blackstone Mortgage Trust | ELLINGTON RESIDMTG vs. KKR REAL ESTFINTR | ELLINGTON RESIDMTG vs. Dynex Capital | ELLINGTON RESIDMTG vs. ARES MREAL ESTDL 01 |
Check out your portfolio center.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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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