Correlation Between BitMart Token and XRP

Can any of the company-specific risk be diversified away by investing in both BitMart Token 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 BitMart Token and XRP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BitMart Token and XRP, you can compare the effects of market volatilities on BitMart Token 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 BitMart Token with a short position of XRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of BitMart Token and XRP.

Diversification Opportunities for BitMart Token and XRP

-0.22

Correlation Coefficient

BitMart Token  XRP

Very good diversification

The 3 months correlation between BitMart and XRP is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding BitMart Token and XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XRP and BitMart Token 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 BitMart Token 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 BitMart Token i.e., BitMart Token and XRP go up and down completely randomly.

Pair Corralation between BitMart Token and XRP

Assuming the 90 days trading horizon BitMart Token is expected to under-perform the XRP. In addition to that, BitMart Token is 1.01 times more volatile than XRP. It trades about -0.02 of its total potential returns per unit of risk. XRP is currently generating about 0.32 per unit of volatility. If you would invest  56.00  in XRP on September 2, 2024 and sell it today you would earn a total of  139.00  from holding XRP or generate 248.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BitMart Token  vs.  XRP

BitMart Token

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BitMart Token has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Crypto's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for BitMart Token shareholders.

XRP

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, XRP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BitMart Token and XRP

The main advantage of trading using opposite BitMart Token and XRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BitMart Token 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.

The idea behind BitMart Token and XRP 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.