Correlation Between 21Shares Polkadot and Air France
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and Air France 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 21Shares Polkadot and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 21Shares Polkadot ETP and Air France KLM SA, you can compare the effects of market volatilities on 21Shares Polkadot and Air France 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 21Shares Polkadot with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and Air France.
Diversification Opportunities for 21Shares Polkadot and Air France
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 21Shares and Air is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and 21Shares Polkadot 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 21Shares Polkadot ETP are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and Air France go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and Air France
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 1.78 times more return on investment than Air France. However, 21Shares Polkadot is 1.78 times more volatile than Air France KLM SA. It trades about 0.02 of its potential returns per unit of risk. Air France KLM SA is currently generating about -0.03 per unit of risk. If you would invest 285.00 in 21Shares Polkadot ETP on August 26, 2024 and sell it today you would lose (6.00) from holding 21Shares Polkadot ETP or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. Air France KLM SA
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| Air France KLM |
21Shares Polkadot and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and Air France
The main advantage of trading using opposite 21Shares Polkadot and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| 21Shares Polkadot vs. 21Shares Crypto Basket | 21Shares Polkadot vs. 21Shares Decentraland ETP | 21Shares Polkadot vs. 21Shares Uniswap ETP | 21Shares Polkadot vs. 21Shares Cosmos Staking |
| Air France vs. Manitou BF SA | Air France vs. Ossiam Minimum Variance | Air France vs. Granite 3x LVMH | Air France vs. 21Shares Polkadot ETP |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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