Correlation Between XRP and Tether

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

Diversification Opportunities for XRP and Tether

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between XRP and Tether is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Tether in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tether 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 Tether. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tether has no effect on the direction of XRP i.e., XRP and Tether go up and down completely randomly.

Pair Corralation between XRP and Tether

If you would invest  33.00  in XRP on June 30, 2022 and sell it today you would earn a total of  5.00  from holding XRP or generate 15.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy6.25%
ValuesDaily Returns

XRP  vs.  Tether

 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 somewhat weak basic indicators, XRP sustained solid returns over the last few months and may actually be approaching a breakup point.
Tether 
Tether Performance
0 of 100
Over the last 90 days Tether has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Tether is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

XRP and Tether Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with XRP and Tether

The main advantage of trading using opposite XRP and Tether positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Tether 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 Tether will offset losses from the drop in Tether's long position.
XRP vs. Staked Ether
The idea behind XRP and Tether 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.
Tether vs. Staked Ether
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 Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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