Correlation Between 21Shares Polkadot and IShares SP
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and IShares SP 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 IShares SP 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 iShares SP 500, you can compare the effects of market volatilities on 21Shares Polkadot and IShares SP 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 IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and IShares SP.
Diversification Opportunities for 21Shares Polkadot and IShares SP
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 21Shares and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and iShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 500 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 IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP 500 has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and IShares SP go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and IShares SP
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 28.28 times more return on investment than IShares SP. However, 21Shares Polkadot is 28.28 times more volatile than iShares SP 500. It trades about 0.19 of its potential returns per unit of risk. iShares SP 500 is currently generating about 0.32 per unit of risk. If you would invest 292.00 in 21Shares Polkadot ETP on September 20, 2024 and sell it today you would earn a total of 118.00 from holding 21Shares Polkadot ETP or generate 40.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. iShares SP 500
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| iShares SP 500 |
21Shares Polkadot and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and IShares SP
The main advantage of trading using opposite 21Shares Polkadot and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, IShares SP 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 IShares SP will offset losses from the drop in IShares SP's long position.| 21Shares Polkadot vs. Baloise Holding AG | 21Shares Polkadot vs. UBS ETF MSCI | 21Shares Polkadot vs. BB Biotech AG | 21Shares Polkadot vs. Amundi Index Solutions |
| IShares SP vs. iShares Corp Bond | IShares SP vs. iShares Emerging Asia | IShares SP vs. iShares MSCI Global | IShares SP vs. iShares VII PLC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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