Correlation Between XRP and ZKB Silver

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

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

Diversification Opportunities for XRP and ZKB Silver

0.05

Correlation Coefficient

XRP  ZKB Silver

Significant diversification

The 3 months correlation between XRP and ZKB is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding XRP and ZKB Silver ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Silver ETF 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 ZKB Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Silver ETF has no effect on the direction of XRP i.e., XRP and ZKB Silver go up and down completely randomly.

Pair Corralation between XRP and ZKB Silver

Assuming the 90 days trading horizon XRP is expected to generate 1.12 times less return on investment than ZKB Silver. In addition to that, XRP is 4.21 times more volatile than ZKB Silver ETF. It trades about 0.03 of its total potential returns per unit of risk. ZKB Silver ETF is currently generating about 0.16 per unit of volatility. If you would invest  7,575  in ZKB Silver ETF on December 20, 2024 and sell it today you would earn a total of  919.00  from holding ZKB Silver ETF or generate 12.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

XRP  vs.  ZKB Silver ETF

XRP

Risk-Adjusted Performance

Weak

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.

ZKB Silver ETF

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZKB Silver ETF are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, ZKB Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with XRP and ZKB Silver

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

The idea behind XRP and ZKB Silver ETF 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.