Correlation Between 21Shares Polkadot and Invesco FTSE
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and Invesco FTSE 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 Invesco FTSE 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 Invesco FTSE RAFI, you can compare the effects of market volatilities on 21Shares Polkadot and Invesco FTSE 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 Invesco FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and Invesco FTSE.
Diversification Opportunities for 21Shares Polkadot and Invesco FTSE
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 21Shares and Invesco is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and Invesco FTSE RAFI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco FTSE RAFI 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 Invesco FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco FTSE RAFI has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and Invesco FTSE go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and Invesco FTSE
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 3.42 times more return on investment than Invesco FTSE. However, 21Shares Polkadot is 3.42 times more volatile than Invesco FTSE RAFI. It trades about 0.04 of its potential returns per unit of risk. Invesco FTSE RAFI is currently generating about 0.07 per unit of risk. If you would invest 262.00 in 21Shares Polkadot ETP on September 5, 2024 and sell it today you would earn a total of 172.00 from holding 21Shares Polkadot ETP or generate 65.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. Invesco FTSE RAFI
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| Invesco FTSE RAFI |
21Shares Polkadot and Invesco FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and Invesco FTSE
The main advantage of trading using opposite 21Shares Polkadot and Invesco FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, Invesco FTSE 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 Invesco FTSE will offset losses from the drop in Invesco FTSE'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 |
| Invesco FTSE vs. Amundi Index Solutions | Invesco FTSE vs. Manitou BF SA | Invesco FTSE vs. 21Shares Polkadot ETP | Invesco FTSE 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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