Correlation Between Staked Ether and XRP
Can any of the company-specific risk be diversified away by investing in both Staked Ether 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 Staked Ether and XRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Staked Ether and XRP, you can compare the effects of market volatilities on Staked Ether 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 Staked Ether with a short position of XRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Staked Ether and XRP.
Diversification Opportunities for Staked Ether and XRP
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Staked and XRP is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Staked Ether and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and Staked Ether 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 Staked Ether 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 Staked Ether i.e., Staked Ether and XRP go up and down completely randomly.
Pair Corralation between Staked Ether and XRP
Assuming the 90 days trading horizon Staked Ether is expected to generate 0.53 times more return on investment than XRP. However, Staked Ether is 1.87 times less risky than XRP. It trades about 0.08 of its potential returns per unit of risk. XRP is currently generating about 0.03 per unit of risk. If you would invest 187,009 in Staked Ether on January 26, 2024 and sell it today you would earn a total of 133,719 from holding Staked Ether or generate 71.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Staked Ether vs. XRP
Performance |
Timeline |
Staked Ether |
XRP |
Staked Ether and XRP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Staked Ether and XRP
The main advantage of trading using opposite Staked Ether and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Staked Ether 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.Staked Ether vs. Solana | Staked Ether vs. XRP | Staked Ether vs. The Open Network | Staked Ether vs. Avalanche |
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 the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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