Correlation Between XRP and SCHMID Group

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

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

Diversification Opportunities for XRP and SCHMID Group

-0.19

Correlation Coefficient

XRP  SCHMID Group

Good diversification

The 3 months correlation between XRP and SCHMID is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding XRP and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV 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 SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of XRP i.e., XRP and SCHMID Group go up and down completely randomly.

Pair Corralation between XRP and SCHMID Group

Assuming the 90 days trading horizon XRP is expected to generate 1.13 times more return on investment than SCHMID Group. However, XRP is 1.13 times more volatile than SCHMID Group NV. It trades about 0.11 of its potential returns per unit of risk. SCHMID Group NV is currently generating about -0.08 per unit of risk. If you would invest  41.00  in XRP on October 10, 2024 and sell it today you would earn a total of  189.00  from holding XRP or generate 460.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.92%
Values	Daily Returns

XRP  vs.  SCHMID Group NV

XRP

Risk-Adjusted Performance

25 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 25 (%) 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.

SCHMID Group NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCHMID Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with XRP and SCHMID Group

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

The idea behind XRP and SCHMID Group NV 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.