Correlation Between 21Shares Polkadot and Icade SA
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and Icade SA 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 Icade SA 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 Icade SA, you can compare the effects of market volatilities on 21Shares Polkadot and Icade SA 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 Icade SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and Icade SA.
Diversification Opportunities for 21Shares Polkadot and Icade SA
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 21Shares and Icade is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and Icade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icade SA 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 Icade SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icade SA has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and Icade SA go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and Icade SA
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 2.96 times more return on investment than Icade SA. However, 21Shares Polkadot is 2.96 times more volatile than Icade SA. It trades about 0.05 of its potential returns per unit of risk. Icade SA is currently generating about -0.04 per unit of risk. If you would invest 292.00 in 21Shares Polkadot ETP on September 2, 2024 and sell it today you would earn a total of 92.00 from holding 21Shares Polkadot ETP or generate 31.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. Icade SA
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| Icade SA |
21Shares Polkadot and Icade SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and Icade SA
The main advantage of trading using opposite 21Shares Polkadot and Icade SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, Icade SA 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 Icade SA will offset losses from the drop in Icade SA'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 |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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