Correlation Between XT Token and Algorand

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

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

Diversification Opportunities for XT Token and Algorand

-0.12

Correlation Coefficient

XT Token  Algorand

Good diversification

The 3 months correlation between XT Token and Algorand is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding XT Token and Algorand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algorand and XT 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 XT Token are associated (or correlated) with Algorand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algorand has no effect on the direction of XT Token i.e., XT Token and Algorand go up and down completely randomly.

Pair Corralation between XT Token and Algorand

Assuming the 90 days horizon XT Token is expected to generate 0.71 times more return on investment than Algorand. However, XT Token is 1.4 times less risky than Algorand. It trades about 0.06 of its potential returns per unit of risk. Algorand is currently generating about -0.09 per unit of risk. If you would invest  539.00  in XT Token on August 5, 2025 and sell it today you would earn a total of  62.00  from holding XT Token or generate 11.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

XT Token  vs.  Algorand

XT Token

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in XT Token are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, XT Token exhibited solid returns over the last few months and may actually be approaching a breakup point.

Algorand

Risk-Adjusted Performance

Weakest

Over the last 90 days Algorand has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in December 2025. The latest tumult may also be a sign of longer-term up-swing for Algorand shareholders.

Pair Trading with XT Token and Algorand

The main advantage of trading using opposite XT Token and Algorand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XT Token position performs unexpectedly, Algorand 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 Algorand will offset losses from the drop in Algorand's long position.

The idea behind XT Token and Algorand 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 Transaction History module to view history of all your transactions and understand their impact on performance.