Correlation Between Bancor Network and XRP

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

Diversification Opportunities for Bancor Network and XRP

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bancor and XRP is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bancor Network Token and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and Bancor Network 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 Bancor Network Token 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 Bancor Network i.e., Bancor Network and XRP go up and down completely randomly.

Pair Corralation between Bancor Network and XRP

Assuming the 90 days trading horizon Bancor Network is expected to generate 3.82 times less return on investment than XRP. In addition to that, Bancor Network is 1.1 times more volatile than XRP. It trades about 0.05 of its total potential returns per unit of risk. XRP is currently generating about 0.22 per unit of volatility. If you would invest  33.00  in XRP on June 27, 2022 and sell it today you would earn a total of  5.00  from holding XRP or generate 15.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy88.24%
ValuesDaily Returns

Bancor Network Token  vs.  XRP

 Performance (%) 
       Timeline  
Bancor Network Token 
Bancor Performance
0 of 100
Over the last 90 days Bancor Network Token has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bancor Network is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
XRP 
XRP Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 5 (%) 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

Bancor Network and XRP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bancor Network and XRP

The main advantage of trading using opposite Bancor Network and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bancor Network 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.
Bancor Network vs. XRP
Bancor Network vs. Solana
Bancor Network vs. Polkadot
Bancor Network vs. Polygon
The idea behind Bancor Network Token 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. Polygon
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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