Correlation Between PIMCO Euro and 21Shares Polkadot
Can any of the company-specific risk be diversified away by investing in both PIMCO Euro 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 PIMCO Euro and 21Shares Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO Euro Short Term and 21Shares Polkadot ETP, you can compare the effects of market volatilities on PIMCO Euro 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 PIMCO Euro with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO Euro and 21Shares Polkadot.
Diversification Opportunities for PIMCO Euro and 21Shares Polkadot
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PIMCO and 21Shares is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO Euro Short Term 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 PIMCO Euro 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 PIMCO Euro Short Term 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 PIMCO Euro i.e., PIMCO Euro and 21Shares Polkadot go up and down completely randomly.
Pair Corralation between PIMCO Euro and 21Shares Polkadot
Assuming the 90 days trading horizon PIMCO Euro Short Term is expected to generate 0.02 times more return on investment than 21Shares Polkadot. However, PIMCO Euro Short Term is 49.4 times less risky than 21Shares Polkadot. It trades about 0.12 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about -0.21 per unit of risk. If you would invest 1,163 in PIMCO Euro Short Term on November 2, 2024 and sell it today you would earn a total of 3.00 from holding PIMCO Euro Short Term or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
PIMCO Euro Short Term vs. 21Shares Polkadot ETP
Performance |
| Timeline |
| PIMCO Euro Short |
| 21Shares Polkadot ETP |
PIMCO Euro and 21Shares Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PIMCO Euro and 21Shares Polkadot
The main advantage of trading using opposite PIMCO Euro and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO Euro 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.| PIMCO Euro vs. UBSFund Solutions MSCI | PIMCO Euro vs. Vanguard SP 500 | PIMCO Euro vs. iShares VII PLC | PIMCO Euro vs. iShares Core SP |
| 21Shares Polkadot vs. UBSFund Solutions MSCI | 21Shares Polkadot vs. Vanguard SP 500 | 21Shares Polkadot vs. iShares VII PLC | 21Shares Polkadot vs. iShares Core SP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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