Correlation Between XRP and Publity AG

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

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

Diversification Opportunities for XRP and Publity AG

0.4

Correlation Coefficient

XRP  Publity AG

Very weak diversification

The 3 months correlation between XRP and Publity is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Publity AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Publity AG 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 Publity AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Publity AG has no effect on the direction of XRP i.e., XRP and Publity AG go up and down completely randomly.

Pair Corralation between XRP and Publity AG

Assuming the 90 days trading horizon XRP is expected to generate 3.06 times less return on investment than Publity AG. But when comparing it to its historical volatility, XRP is 3.04 times less risky than Publity AG. It trades about 0.06 of its potential returns per unit of risk. Publity AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Publity AG on December 20, 2024 and sell it today you would lose (4.00) from holding Publity AG or give up 11.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

XRP  vs.  Publity AG

XRP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 4 (%) 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.

Publity AG

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Publity AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Publity AG unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XRP and Publity AG

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

The idea behind XRP and Publity AG 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..