Correlation Between XRP and Staked Ether

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

Diversification Opportunities for XRP and Staked Ether

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between XRP and Staked is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Staked Ether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staked Ether 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 Staked Ether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staked Ether has no effect on the direction of XRP i.e., XRP and Staked Ether go up and down completely randomly.

Pair Corralation between XRP and Staked Ether

Assuming the 90 days trading horizon XRP is expected to generate 1.4 times more return on investment than Staked Ether. However, XRP is 1.4 times more volatile than Staked Ether. It trades about 0.17 of its potential returns per unit of risk. Staked Ether is currently generating about 0.1 per unit of risk. If you would invest  33.00  in XRP on September 9, 2022 and sell it today you would earn a total of  6.00  from holding XRP or generate 18.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

XRP  vs.  Staked Ether

 Performance (%) 
       Timeline  
XRP 
XRP Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 3 (%) 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

Staked Ether 
Staked Performance
0 of 100
Over the last 90 days Staked Ether 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 January 2023. The current disturbance may also be a sign of long term up-swing for Staked Ether investors.

Staked Price Channel

XRP and Staked Ether Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with XRP and Staked Ether

The main advantage of trading using opposite XRP and Staked Ether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Staked Ether 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 Staked Ether will offset losses from the drop in Staked Ether's long position.
XRP vs. Polygon
XRP vs. Solana
XRP vs. Chainlink
XRP vs. Polkadot
The idea behind XRP and Staked Ether 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.
Staked Ether vs. XRP
Staked Ether vs. Polygon
Staked Ether vs. Solana
Staked Ether vs. Chainlink
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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