Correlation Between XRP and FIBRA Prologis

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

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

Diversification Opportunities for XRP and FIBRA Prologis

-0.21

Correlation Coefficient

XRP  FIBRA Prologis

Very good diversification

The 3 months correlation between XRP and FIBRA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding XRP and FIBRA Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBRA Prologis 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 FIBRA Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBRA Prologis has no effect on the direction of XRP i.e., XRP and FIBRA Prologis go up and down completely randomly.

Pair Corralation between XRP and FIBRA Prologis

Assuming the 90 days trading horizon XRP is expected to generate 1.12 times less return on investment than FIBRA Prologis. In addition to that, XRP is 2.5 times more volatile than FIBRA Prologis. It trades about 0.04 of its total potential returns per unit of risk. FIBRA Prologis is currently generating about 0.11 per unit of volatility. If you would invest  5,827  in FIBRA Prologis on December 21, 2024 and sell it today you would earn a total of  786.00  from holding FIBRA Prologis or generate 13.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

XRP  vs.  FIBRA Prologis

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.

FIBRA Prologis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Prologis are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, FIBRA Prologis disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XRP and FIBRA Prologis

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

The idea behind XRP and FIBRA Prologis 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.