Correlation Between XRP and AUC

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

Diversification Opportunities for XRP and AUC

0.68
  Correlation Coefficient
 XRP
 AUC

Poor diversification

The 3 months correlation between XRP and AUC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding XRP and AUC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUC 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 AUC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUC has no effect on the direction of XRP i.e., XRP and AUC go up and down completely randomly.

Pair Corralation between XRP and AUC

Assuming the 90 days trading horizon XRP is expected to generate 2.0 times more return on investment than AUC. However, XRP is 2.0 times more volatile than AUC. It trades about 0.23 of its potential returns per unit of risk. AUC is currently generating about 0.21 per unit of risk. If you would invest  218.00  in XRP on April 24, 2025 and sell it today you would earn a total of  137.00  from holding XRP or generate 62.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

XRP  vs.  AUC

 Performance 
       Timeline  
XRP 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in XRP are ranked lower than 18 (%) 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.
AUC 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AUC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, AUC exhibited solid returns over the last few months and may actually be approaching a breakup point.

XRP and AUC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with XRP and AUC

The main advantage of trading using opposite XRP and AUC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, AUC 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 AUC will offset losses from the drop in AUC's long position.
The idea behind XRP and AUC 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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