Correlation Between XRP and BitMart Token

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

Diversification Opportunities for XRP and BitMart Token

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between XRP and BitMart is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding XRP and BitMart Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitMart Token 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 BitMart Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitMart Token has no effect on the direction of XRP i.e., XRP and BitMart Token go up and down completely randomly.

Pair Corralation between XRP and BitMart Token

Assuming the 90 days trading horizon XRP is expected to under-perform the BitMart Token. But the crypto coin apears to be less risky and, when comparing its historical volatility, XRP is 1.1 times less risky than BitMart Token. The crypto coin trades about -0.07 of its potential returns per unit of risk. The BitMart Token is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  39.00  in BitMart Token on May 18, 2022 and sell it today you would lose (17.00)  from holding BitMart Token or give up 43.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

XRP  vs.  BitMart Token

 Performance (%) 
       Timeline  
XRP 
XRP Performance
0 of 100
Over the last 90 days XRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, XRP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

XRP Price Channel

BitMart Token 
BitMart Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BitMart Token are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, BitMart Token sustained solid returns over the last few months and may actually be approaching a breakup point.

BitMart Price Channel

XRP and BitMart Token Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with XRP and BitMart Token

The main advantage of trading using opposite XRP and BitMart Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, BitMart Token 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 BitMart Token will offset losses from the drop in BitMart Token's long position.
The idea behind XRP and BitMart Token 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.
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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