Correlation Between XRP and Band Protocol
Can any of the company-specific risk be diversified away by investing in both XRP and Band Protocol 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 Band Protocol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XRP and Band Protocol, you can compare the effects of market volatilities on XRP and Band Protocol 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 Band Protocol. Check out your portfolio center. Please also check ongoing floating volatility patterns of XRP and Band Protocol.
Diversification Opportunities for XRP and Band Protocol
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XRP and Band is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding XRP and Band Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Band Protocol 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 Band Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Band Protocol has no effect on the direction of XRP i.e., XRP and Band Protocol go up and down completely randomly.
Pair Corralation between XRP and Band Protocol
Assuming the 90 days trading horizon XRP is expected to generate 1.29 times less return on investment than Band Protocol. But when comparing it to its historical volatility, XRP is 1.91 times less risky than Band Protocol. It trades about 0.1 of its potential returns per unit of risk. Band Protocol is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 69.00 in Band Protocol on June 2, 2025 and sell it today you would earn a total of 12.00 from holding Band Protocol or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XRP vs. Band Protocol
Performance |
| Timeline |
| XRP |
| Band Protocol |
XRP and Band Protocol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XRP and Band Protocol
The main advantage of trading using opposite XRP and Band Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XRP position performs unexpectedly, Band Protocol 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 Band Protocol will offset losses from the drop in Band Protocol's long position.The idea behind XRP and Band Protocol 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.| Band Protocol vs. Staked Ether | Band Protocol vs. Phala Network | Band Protocol vs. EOSDAC | Band Protocol vs. BLZ |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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