Correlation Between 21Shares Polkadot and HSBC Emerging
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and HSBC Emerging 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 HSBC Emerging 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 HSBC Emerging Market, you can compare the effects of market volatilities on 21Shares Polkadot and HSBC Emerging 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 HSBC Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and HSBC Emerging.
Diversification Opportunities for 21Shares Polkadot and HSBC Emerging
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 21Shares and HSBC is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and HSBC Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC Emerging Market 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 HSBC Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC Emerging Market has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and HSBC Emerging go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and HSBC Emerging
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 16.6 times more return on investment than HSBC Emerging. However, 21Shares Polkadot is 16.6 times more volatile than HSBC Emerging Market. It trades about 0.41 of its potential returns per unit of risk. HSBC Emerging Market is currently generating about -0.03 per unit of risk. If you would invest 184.00 in 21Shares Polkadot ETP on September 2, 2024 and sell it today you would earn a total of 200.00 from holding 21Shares Polkadot ETP or generate 108.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. HSBC Emerging Market
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| HSBC Emerging Market |
21Shares Polkadot and HSBC Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and HSBC Emerging
The main advantage of trading using opposite 21Shares Polkadot and HSBC Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, HSBC Emerging 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 HSBC Emerging will offset losses from the drop in HSBC Emerging's long position.| 21Shares Polkadot vs. Lyxor UCITS Japan | 21Shares Polkadot vs. Lyxor UCITS Japan | 21Shares Polkadot vs. Lyxor UCITS Stoxx | 21Shares Polkadot vs. Amundi CAC 40 |
| HSBC Emerging vs. Manitou BF SA | HSBC Emerging vs. Granite 3x LVMH | HSBC Emerging vs. 21Shares Polkadot ETP | HSBC Emerging vs. Ekinops 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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