Correlation Between Icade SA and 21Shares Polkadot
Can any of the company-specific risk be diversified away by investing in both Icade 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 Icade 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 Icade SA and 21Shares Polkadot ETP, you can compare the effects of market volatilities on Icade 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 Icade SA with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icade SA and 21Shares Polkadot.
Diversification Opportunities for Icade SA and 21Shares Polkadot
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icade and 21Shares is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Icade 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 Icade 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 Icade 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 Icade SA i.e., Icade SA and 21Shares Polkadot go up and down completely randomly.
Pair Corralation between Icade SA and 21Shares Polkadot
Assuming the 90 days trading horizon Icade SA is expected to under-perform the 21Shares Polkadot. But the stock apears to be less risky and, when comparing its historical volatility, Icade SA is 2.96 times less risky than 21Shares Polkadot. The stock trades about -0.04 of its potential returns per unit of risk. The 21Shares Polkadot ETP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 292.00 in 21Shares Polkadot ETP on September 2, 2024 and sell it today you would earn a total of 92.00 from holding 21Shares Polkadot ETP or generate 31.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Icade SA vs. 21Shares Polkadot ETP
Performance |
| Timeline |
| Icade SA |
| 21Shares Polkadot ETP |
Icade SA and 21Shares Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icade SA and 21Shares Polkadot
The main advantage of trading using opposite Icade SA and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icade 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.The idea behind Icade SA and 21Shares Polkadot ETP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 21Shares Polkadot vs. Lyxor UCITS Japan | 21Shares Polkadot vs. Lyxor UCITS Japan | 21Shares Polkadot vs. Lyxor UCITS Stoxx | 21Shares Polkadot vs. Amundi CAC 40 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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