Correlation Between Carmila SA and 21Shares Polkadot
Can any of the company-specific risk be diversified away by investing in both Carmila SA and 21Shares Polkadot 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 Carmila SA and 21Shares Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmila SA and 21Shares Polkadot ETP, you can compare the effects of market volatilities on Carmila SA and 21Shares Polkadot 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 Carmila SA with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmila SA and 21Shares Polkadot.
Diversification Opportunities for Carmila SA and 21Shares Polkadot
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carmila and 21Shares is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Carmila SA and 21Shares Polkadot ETP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Polkadot ETP and Carmila SA 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 Carmila SA are associated (or correlated) with 21Shares Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Polkadot ETP has no effect on the direction of Carmila SA i.e., Carmila SA and 21Shares Polkadot go up and down completely randomly.
Pair Corralation between Carmila SA and 21Shares Polkadot
Assuming the 90 days trading horizon Carmila SA is expected to generate 2.46 times less return on investment than 21Shares Polkadot. But when comparing it to its historical volatility, Carmila SA is 3.11 times less risky than 21Shares Polkadot. It trades about 0.05 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 249.00 in 21Shares Polkadot ETP on August 31, 2024 and sell it today you would earn a total of 135.00 from holding 21Shares Polkadot ETP or generate 54.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Carmila SA vs. 21Shares Polkadot ETP
Performance |
| Timeline |
| Carmila SA |
| 21Shares Polkadot ETP |
Carmila SA and 21Shares Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmila SA and 21Shares Polkadot
The main advantage of trading using opposite Carmila SA and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmila SA position performs unexpectedly, 21Shares Polkadot 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 21Shares Polkadot will offset losses from the drop in 21Shares Polkadot's long position.| Carmila SA vs. Altarea SCA | Carmila SA vs. Icade SA | Carmila SA vs. Manitou BF SA | Carmila SA vs. Ossiam Minimum Variance |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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