Correlation Between 21Shares Polkadot and Amundi FTSE
Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and Amundi 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 Amundi 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 Amundi FTSE EPRANAREIT, you can compare the effects of market volatilities on 21Shares Polkadot and Amundi 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 Amundi FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and Amundi FTSE.
Diversification Opportunities for 21Shares Polkadot and Amundi FTSE
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 21Shares and Amundi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and Amundi FTSE EPRANAREIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi FTSE EPRANAREIT 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 Amundi FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi FTSE EPRANAREIT has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and Amundi FTSE go up and down completely randomly.
Pair Corralation between 21Shares Polkadot and Amundi FTSE
Assuming the 90 days trading horizon 21Shares Polkadot is expected to generate 1.39 times less return on investment than Amundi FTSE. But when comparing it to its historical volatility, 21Shares Polkadot ETP is 1.49 times less risky than Amundi FTSE. It trades about 0.05 of its potential returns per unit of risk. Amundi FTSE EPRANAREIT is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,636 in Amundi FTSE EPRANAREIT on September 14, 2024 and sell it today you would earn a total of 2,727 from holding Amundi FTSE EPRANAREIT or generate 166.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.38% |
| Values | Daily Returns |
21Shares Polkadot ETP vs. Amundi FTSE EPRANAREIT
Performance |
| Timeline |
| 21Shares Polkadot ETP |
| Amundi FTSE EPRANAREIT |
21Shares Polkadot and Amundi FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 21Shares Polkadot and Amundi FTSE
The main advantage of trading using opposite 21Shares Polkadot and Amundi FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, Amundi 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 Amundi FTSE will offset losses from the drop in Amundi FTSE's long position.| 21Shares Polkadot vs. 21Shares Polygon ETP | 21Shares Polkadot vs. 21Shares Ethereum Core | 21Shares Polkadot vs. 21Shares Tezos staking | 21Shares Polkadot vs. 21Shares Bitcoin ETP |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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