Correlation Between Celer Network and XRP

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

Diversification Opportunities for Celer Network and XRP

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between Celer and XRP is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Celer Network and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and Celer 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 Celer Network 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 Celer Network i.e., Celer Network and XRP go up and down completely randomly.

Pair Corralation between Celer Network and XRP

Assuming the 90 days trading horizon Celer Network is expected to generate 1.77 times more return on investment than XRP. However, Celer Network is 1.77 times more volatile than XRP. It trades about 0.19 of its potential returns per unit of risk. XRP is currently generating about 0.08 per unit of risk. If you would invest  1.41  in Celer Network on May 15, 2022 and sell it today you would earn a total of  0.82  from holding Celer Network or generate 58.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy93.18%
ValuesDaily Returns

Celer Network  vs.  XRP

 Performance (%) 
       Timeline  
Celer Network 
Celer Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Celer Network are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Celer Network sustained solid returns over the last few months and may actually be approaching a breakup point.

Celer Price Channel

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 latest weak performance, the Crypto's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for XRP investors.

XRP Price Channel

Celer Network and XRP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Celer Network and XRP

The main advantage of trading using opposite Celer Network and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celer 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.
The idea behind Celer Network 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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