Correlation Between XRP and SPDR SSGA

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

By analyzing existing cross correlation between XRP and SPDR SSGA My2029, you can compare the effects of market volatilities on XRP and SPDR SSGA 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 SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and SPDR SSGA.

Diversification Opportunities for XRP and SPDR SSGA

0.22

Correlation Coefficient

XRP  SPDR SSGA

Modest diversification

The 3 months correlation between XRP and SPDR is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding XRP and SPDR SSGA My2029 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA My2029 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA My2029 has no effect on the direction of XRP i.e., XRP and SPDR SSGA go up and down completely randomly.

Pair Corralation between XRP and SPDR SSGA

Assuming the 90 days trading horizon XRP is expected to generate 22.99 times more return on investment than SPDR SSGA. However, XRP is 22.99 times more volatile than SPDR SSGA My2029. It trades about 0.2 of its potential returns per unit of risk. SPDR SSGA My2029 is currently generating about -0.05 per unit of risk. If you would invest  54.00  in XRP on October 24, 2024 and sell it today you would earn a total of  264.00  from holding XRP or generate 488.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	46.86%
Values	Daily Returns

XRP  vs.  SPDR SSGA My2029

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.

SPDR SSGA My2029

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA My2029 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, SPDR SSGA is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with XRP and SPDR SSGA

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

The idea behind XRP and SPDR SSGA My2029 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.