Correlation Between 21Shares Polkadot and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and SPDR Dow 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 SPDR Dow 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 SPDR Dow Jones, you can compare the effects of market volatilities on 21Shares Polkadot and SPDR Dow 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 SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and SPDR Dow.
Diversification Opportunities for 21Shares Polkadot and SPDR Dow
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 21Shares and SPDR is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones 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 SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and SPDR Dow go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and SPDR Dow
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 6.54 times more return on investment than SPDR Dow. However, 21Shares Polkadot is 6.54 times more volatile than SPDR Dow Jones. It trades about 0.19 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.09 per unit of risk. If you would invest 221.00 in 21Shares Polkadot ETP on August 28, 2024 and sell it today you would earn a total of 213.00 from holding 21Shares Polkadot ETP or generate 96.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. SPDR Dow Jones
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| SPDR Dow Jones |
21Shares Polkadot and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and SPDR Dow
The main advantage of trading using opposite 21Shares Polkadot and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.| 21Shares Polkadot vs. UBSFund Solutions MSCI | 21Shares Polkadot vs. iShares VII PLC | 21Shares Polkadot vs. iShares SP 500 | 21Shares Polkadot vs. Lyxor UCITS Stoxx |
| SPDR Dow vs. UBSFund Solutions MSCI | SPDR Dow vs. iShares VII PLC | SPDR Dow vs. iShares SP 500 | SPDR Dow vs. Lyxor UCITS Stoxx |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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