Correlation Between 21Shares Polkadot and BigBen Interactive
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and BigBen Interactive 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 BigBen Interactive 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 BigBen Interactive, you can compare the effects of market volatilities on 21Shares Polkadot and BigBen Interactive 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 BigBen Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and BigBen Interactive.
Diversification Opportunities for 21Shares Polkadot and BigBen Interactive
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 21Shares and BigBen is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and BigBen Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBen Interactive 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 BigBen Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBen Interactive has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and BigBen Interactive go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and BigBen Interactive
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 4.05 times more return on investment than BigBen Interactive. However, 21Shares Polkadot is 4.05 times more volatile than BigBen Interactive. It trades about 0.29 of its potential returns per unit of risk. BigBen Interactive is currently generating about -0.54 per unit of risk. If you would invest 188.00 in 21Shares Polkadot ETP on August 28, 2024 and sell it today you would earn a total of 91.00 from holding 21Shares Polkadot ETP or generate 48.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. BigBen Interactive
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| BigBen Interactive |
21Shares Polkadot and BigBen Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and BigBen Interactive
The main advantage of trading using opposite 21Shares Polkadot and BigBen Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, BigBen Interactive 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 BigBen Interactive will offset losses from the drop in BigBen Interactive'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 |
| BigBen Interactive vs. Nacon Sa | BigBen Interactive vs. Chargeurs SA | BigBen Interactive vs. Claranova SE | BigBen Interactive vs. Trigano SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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