Correlation Between XRP and Uniswap Protocol

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

Diversification Opportunities for XRP and Uniswap Protocol

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between XRP and Uniswap is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Uniswap Protocol Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniswap Protocol 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 Uniswap Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniswap Protocol Token has no effect on the direction of XRP i.e., XRP and Uniswap Protocol go up and down completely randomly.

Pair Corralation between XRP and Uniswap Protocol

Assuming the 90 days trading horizon XRP is expected to under-perform the Uniswap Protocol. But the crypto coin apears to be less risky and, when comparing its historical volatility, XRP is 1.03 times less risky than Uniswap Protocol. The crypto coin trades about -0.04 of its potential returns per unit of risk. The Uniswap Protocol Token is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  617.00  in Uniswap Protocol Token on July 2, 2022 and sell it today you would earn a total of  16.00  from holding Uniswap Protocol Token or generate 2.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy6.88%
ValuesDaily Returns

XRP  vs.  Uniswap Protocol Token

 Performance (%) 
       Timeline  
XRP 
XRP Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 11 (%) 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

Uniswap Protocol Token 
Uniswap Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Uniswap Protocol Token are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Uniswap Protocol sustained solid returns over the last few months and may actually be approaching a breakup point.

Uniswap Price Channel

XRP and Uniswap Protocol Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with XRP and Uniswap Protocol

The main advantage of trading using opposite XRP and Uniswap Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Uniswap Protocol 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 Uniswap Protocol will offset losses from the drop in Uniswap Protocol's long position.
XRP vs. Solana
XRP vs. Polkadot
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XRP vs. Polygon
The idea behind XRP and Uniswap Protocol 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.
Uniswap Protocol vs. XRP
Uniswap Protocol vs. Solana
Uniswap Protocol vs. Polkadot
Uniswap Protocol 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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