Correlation Between Beta Finance and XRP

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

Diversification Opportunities for Beta Finance and XRP

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Beta Finance and XRP is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Beta Finance and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and Beta Finance 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 Beta Finance are associated (or correlated) with XRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XRP has no effect on the direction of Beta Finance i.e., Beta Finance and XRP go up and down completely randomly.

Pair Corralation between Beta Finance and XRP

Assuming the 90 days trading horizon Beta Finance is expected to generate 13.32 times more return on investment than XRP. However, Beta Finance is 13.32 times more volatile than XRP. It trades about 0.06 of its potential returns per unit of risk. XRP is currently generating about -0.06 per unit of risk. If you would invest  0.00  in Beta Finance on June 28, 2022 and sell it today you would earn a total of  9.96  from holding Beta Finance or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy91.21%
ValuesDaily Returns

Beta Finance  vs.  XRP

 Performance (%) 
       Timeline  
Beta Finance 
Beta Finance Performance
0 of 100
Over the last 90 days Beta Finance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Beta Finance sustained solid returns over the last few months and may actually be approaching a breakup point.
XRP 
XRP Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, XRP sustained solid returns over the last few months and may actually be approaching a breakup point.

XRP Price Channel

Beta Finance and XRP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beta Finance and XRP

The main advantage of trading using opposite Beta Finance and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beta Finance position performs unexpectedly, XRP 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 XRP will offset losses from the drop in XRP's long position.
Beta Finance vs. XRP
Beta Finance vs. Solana
Beta Finance vs. Polkadot
Beta Finance vs. Chainlink
The idea behind Beta Finance and XRP 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.
XRP vs. Solana
XRP vs. Polkadot
XRP vs. Chainlink
XRP vs. FTX Token
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 Shere Portfolio module to track or share privately all of your investments from the convenience of any device.

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