Correlation Between XRP and Westpac Banking

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

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

Diversification Opportunities for XRP and Westpac Banking

0.0

Correlation Coefficient

XRP  Westpac Banking

Pay attention - limited upside

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

Pair Corralation between XRP and Westpac Banking

If you would invest  228.00  in XRP on December 19, 2024 and sell it today you would earn a total of  1.00  from holding XRP or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

XRP  vs.  Westpac Banking Corp

XRP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, XRP may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Westpac Banking Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Westpac Banking Corp has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Westpac Banking is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with XRP and Westpac Banking

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

The idea behind XRP and Westpac Banking Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.