Correlation Between Stellar and XT Token
Can any of the company-specific risk be diversified away by investing in both Stellar and XT Token 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 Stellar and XT Token into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and XT Token, you can compare the effects of market volatilities on Stellar and XT Token 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 Stellar with a short position of XT Token. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and XT Token.
Diversification Opportunities for Stellar and XT Token
Very weak diversification
The 3 months correlation between Stellar and XT Token is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and XT Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XT Token and Stellar 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 Stellar are associated (or correlated) with XT Token. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XT Token has no effect on the direction of Stellar i.e., Stellar and XT Token go up and down completely randomly.
Pair Corralation between Stellar and XT Token
Assuming the 90 days trading horizon Stellar is expected to generate 1.87 times more return on investment than XT Token. However, Stellar is 1.87 times more volatile than XT Token. It trades about 0.13 of its potential returns per unit of risk. XT Token is currently generating about 0.18 per unit of risk. If you would invest 26.00 in Stellar on June 12, 2025 and sell it today you would earn a total of 11.00 from holding Stellar or generate 42.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellar vs. XT Token
Performance |
| Timeline |
| Stellar |
| XT Token |
Stellar and XT Token Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and XT Token
The main advantage of trading using opposite Stellar and XT Token positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, XT Token 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 XT Token will offset losses from the drop in XT Token's long position.The idea behind Stellar and XT Token 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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