Correlation Between XRP and Wildcat Resources

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

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

Diversification Opportunities for XRP and Wildcat Resources

-0.82

Correlation Coefficient

XRP  Wildcat Resources

Pay attention - limited upside

The 3 months correlation between XRP and Wildcat is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Wildcat Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wildcat 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 Wildcat Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wildcat Resources has no effect on the direction of XRP i.e., XRP and Wildcat Resources go up and down completely randomly.

Pair Corralation between XRP and Wildcat Resources

Assuming the 90 days trading horizon XRP is expected to generate 1.08 times more return on investment than Wildcat Resources. However, XRP is 1.08 times more volatile than Wildcat Resources. It trades about 0.15 of its potential returns per unit of risk. Wildcat Resources is currently generating about 0.05 per unit of risk. If you would invest  49.00  in XRP on October 24, 2024 and sell it today you would earn a total of  269.00  from holding XRP or generate 548.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	48.35%
Values	Daily Returns

XRP  vs.  Wildcat Resources

XRP

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 31 (%) 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.

Wildcat Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wildcat Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with XRP and Wildcat Resources

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

The idea behind XRP and Wildcat 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.