Correlation Between XRP and Pabrai Wagons

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

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

Diversification Opportunities for XRP and Pabrai Wagons

0.19

Correlation Coefficient

XRP  Pabrai Wagons

Average diversification

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

Pair Corralation between XRP and Pabrai Wagons

Assuming the 90 days trading horizon XRP is expected to generate 4.35 times more return on investment than Pabrai Wagons. However, XRP is 4.35 times more volatile than Pabrai Wagons Institutional. It trades about 0.03 of its potential returns per unit of risk. Pabrai Wagons Institutional is currently generating about -0.29 per unit of risk. 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	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

XRP  vs.  Pabrai Wagons Institutional

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.

Pabrai Wagons Instit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pabrai Wagons Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with XRP and Pabrai Wagons

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

The idea behind XRP and Pabrai Wagons Institutional 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.