Correlation Between Amundi Stoxx and WisdomTree Polkadot
Can any of the company-specific risk be diversified away by investing in both Amundi Stoxx and WisdomTree 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 Amundi Stoxx and WisdomTree Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amundi Stoxx Global and WisdomTree Polkadot EUR, you can compare the effects of market volatilities on Amundi Stoxx and WisdomTree 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 Amundi Stoxx with a short position of WisdomTree Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amundi Stoxx and WisdomTree Polkadot.
Diversification Opportunities for Amundi Stoxx and WisdomTree Polkadot
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amundi and WisdomTree is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Stoxx Global and WisdomTree Polkadot EUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Polkadot EUR and Amundi Stoxx 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 Amundi Stoxx Global are associated (or correlated) with WisdomTree Polkadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Polkadot EUR has no effect on the direction of Amundi Stoxx i.e., Amundi Stoxx and WisdomTree Polkadot go up and down completely randomly.
Pair Corralation between Amundi Stoxx and WisdomTree Polkadot
Assuming the 90 days trading horizon Amundi Stoxx is expected to generate 5.38 times less return on investment than WisdomTree Polkadot. But when comparing it to its historical volatility, Amundi Stoxx Global is 7.79 times less risky than WisdomTree Polkadot. It trades about 0.15 of its potential returns per unit of risk. WisdomTree Polkadot EUR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 212.00 in WisdomTree Polkadot EUR on November 2, 2024 and sell it today you would earn a total of 125.00 from holding WisdomTree Polkadot EUR or generate 58.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.13% |
| Values | Daily Returns |
Amundi Stoxx Global vs. WisdomTree Polkadot EUR
Performance |
| Timeline |
| Amundi Stoxx Global |
| WisdomTree Polkadot EUR |
Amundi Stoxx and WisdomTree Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amundi Stoxx and WisdomTree Polkadot
The main advantage of trading using opposite Amundi Stoxx and WisdomTree Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amundi Stoxx position performs unexpectedly, WisdomTree 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 WisdomTree Polkadot will offset losses from the drop in WisdomTree Polkadot's long position.| Amundi Stoxx vs. Lyxor UCITS NASDAQ 100 | Amundi Stoxx vs. Lyxor UCITS Stoxx | Amundi Stoxx vs. Lyxor UCITS MSCI | Amundi Stoxx vs. Multi Units Luxembourg |
| WisdomTree Polkadot vs. WisdomTree Wheat EUR | WisdomTree Polkadot vs. WisdomTree Bitcoin EUR | WisdomTree Polkadot vs. WisdomTree Gold EUR | WisdomTree Polkadot vs. WisdomTree Cardano EUR |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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