Correlation Between 21Shares Polkadot and Lyxor Euro
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and Lyxor Euro 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 Lyxor Euro 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 Lyxor Euro Stoxx, you can compare the effects of market volatilities on 21Shares Polkadot and Lyxor Euro 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 Lyxor Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and Lyxor Euro.
Diversification Opportunities for 21Shares Polkadot and Lyxor Euro
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 21Shares and Lyxor is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and Lyxor Euro Stoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Euro Stoxx 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 Lyxor Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Euro Stoxx has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and Lyxor Euro go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and Lyxor Euro
Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 7.64 times more return on investment than Lyxor Euro. However, 21Shares Polkadot is 7.64 times more volatile than Lyxor Euro Stoxx. It trades about 0.22 of its potential returns per unit of risk. Lyxor Euro Stoxx is currently generating about 0.21 per unit of risk. If you would invest 292.00 in 21Shares Polkadot ETP on September 19, 2024 and sell it today you would earn a total of 141.00 from holding 21Shares Polkadot ETP or generate 48.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. Lyxor Euro Stoxx
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| Lyxor Euro Stoxx |
21Shares Polkadot and Lyxor Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and Lyxor Euro
The main advantage of trading using opposite 21Shares Polkadot and Lyxor Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, Lyxor Euro 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 Lyxor Euro will offset losses from the drop in Lyxor Euro'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 |
| Lyxor Euro vs. Baloise Holding AG | Lyxor Euro vs. 21Shares Polkadot ETP | Lyxor Euro vs. UBS ETF MSCI | Lyxor Euro vs. BB Biotech AG |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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