Correlation Between XRP and Magnis Resources

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Can any of the company-specific risk be diversified away by investing in both XRP and Magnis 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 Magnis Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Magnis Resources Limited, you can compare the effects of market volatilities on XRP and Magnis 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 Magnis Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Magnis Resources.

Diversification Opportunities for XRP and Magnis Resources

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between XRP and Magnis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Magnis Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnis 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 Magnis Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnis Resources has no effect on the direction of XRP i.e., XRP and Magnis Resources go up and down completely randomly.

Pair Corralation between XRP and Magnis Resources

Assuming the 90 days trading horizon XRP is expected to generate 1.92 times more return on investment than Magnis Resources. However, XRP is 1.92 times more volatile than Magnis Resources Limited. It trades about 0.11 of its potential returns per unit of risk. Magnis Resources Limited 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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy59.4%
ValuesDaily Returns

XRP  vs.  Magnis Resources Limited

 Performance 
       Timeline  
XRP 

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
Solid
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.
Magnis Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Magnis Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Magnis Resources is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

XRP and Magnis Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with XRP and Magnis Resources

The main advantage of trading using opposite XRP and Magnis Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Magnis 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 Magnis Resources will offset losses from the drop in Magnis Resources' long position.
The idea behind XRP and Magnis Resources Limited 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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