Correlation Between XRP and Kwesst Micro

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

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

Diversification Opportunities for XRP and Kwesst Micro

-0.39

Correlation Coefficient

XRP  Kwesst Micro

Very good diversification

The 3 months correlation between XRP and Kwesst is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Kwesst Micro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwesst Micro Systems 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 Kwesst Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwesst Micro Systems has no effect on the direction of XRP i.e., XRP and Kwesst Micro go up and down completely randomly.

Pair Corralation between XRP and Kwesst Micro

Assuming the 90 days trading horizon XRP is expected to generate 0.65 times more return on investment than Kwesst Micro. However, XRP is 1.54 times less risky than Kwesst Micro. It trades about 0.13 of its potential returns per unit of risk. Kwesst Micro Systems is currently generating about -0.02 per unit of risk. If you would invest  41.00  in XRP on October 25, 2024 and sell it today you would earn a total of  276.00  from holding XRP or generate 673.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.12%
Values	Daily Returns

XRP  vs.  Kwesst Micro Systems

XRP

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 31 (%) 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.

Kwesst Micro Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kwesst Micro Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with XRP and Kwesst Micro

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

The idea behind XRP and Kwesst Micro Systems 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.