Correlation Between XRP and My Neighbor

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both XRP and My Neighbor 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 My Neighbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and My Neighbor Alice, you can compare the effects of market volatilities on XRP and My Neighbor 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 My Neighbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and My Neighbor.

Diversification Opportunities for XRP and My Neighbor

0.99
  Correlation Coefficient

No risk reduction

The 3 months correlation between XRP and ALICE is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding XRP and My Neighbor Alice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on My Neighbor Alice 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 My Neighbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of My Neighbor Alice has no effect on the direction of XRP i.e., XRP and My Neighbor go up and down completely randomly.

Pair Corralation between XRP and My Neighbor

Assuming the 90 days trading horizon XRP is expected to under-perform the My Neighbor. But the crypto coin apears to be less risky and, when comparing its historical volatility, XRP is 1.65 times less risky than My Neighbor. The crypto coin trades about -0.09 of its potential returns per unit of risk. The My Neighbor Alice is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  314.00  in My Neighbor Alice on March 30, 2022 and sell it today you would lose (34.00)  from holding My Neighbor Alice or give up 10.83% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

XRP  vs.  My Neighbor Alice

 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 weak performance in the last few months, the Crypto's basic indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for XRP investors.

XRP Price Channel

My Neighbor Alice 
ALICE Performance
0 of 100
Over the last 90 days My Neighbor Alice has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's fundamental indicators remain somewhat strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for My Neighbor Alice investors.

ALICE Price Channel

XRP and My Neighbor Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with XRP and My Neighbor

The main advantage of trading using opposite XRP and My Neighbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, My Neighbor 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 My Neighbor will offset losses from the drop in My Neighbor's long position.
The idea behind XRP and My Neighbor Alice 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Bond Directory
Find actively traded corporate debentures issued by US companies
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go