Correlation Between XRP and Tonogold Resources

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

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

Diversification Opportunities for XRP and Tonogold Resources

-0.26

Correlation Coefficient

XRP  Tonogold Resources

Very good diversification

The 3 months correlation between XRP and Tonogold is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Tonogold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonogold Resources 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 Tonogold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonogold Resources has no effect on the direction of XRP i.e., XRP and Tonogold Resources go up and down completely randomly.

Pair Corralation between XRP and Tonogold Resources

Assuming the 90 days trading horizon XRP is expected to generate 0.51 times more return on investment than Tonogold Resources. However, XRP is 1.97 times less risky than Tonogold Resources. It trades about 0.38 of its potential returns per unit of risk. Tonogold Resources is currently generating about 0.04 per unit of risk. If you would invest  53.00  in XRP on October 26, 2024 and sell it today you would earn a total of  258.00  from holding XRP or generate 486.79% return on investment over 90 days.

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

XRP  vs.  Tonogold Resources

XRP

Risk-Adjusted Performance

30 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 30 (%) 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.

Tonogold Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tonogold Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Tonogold Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XRP and Tonogold Resources

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

The idea behind XRP and Tonogold Resources 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.