Correlation Between IShares European and 21Shares Polkadot
Can any of the company-specific risk be diversified away by investing in both IShares European 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 IShares European and 21Shares Polkadot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares European Property and 21Shares Polkadot ETP, you can compare the effects of market volatilities on IShares European 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 IShares European with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares European and 21Shares Polkadot.
Diversification Opportunities for IShares European and 21Shares Polkadot
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and 21Shares is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares European Property 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 IShares European 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 iShares European Property 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 IShares European i.e., IShares European and 21Shares Polkadot go up and down completely randomly.
Pair Corralation between IShares European and 21Shares Polkadot
Assuming the 90 days trading horizon IShares European is expected to generate 335.05 times less return on investment than 21Shares Polkadot. But when comparing it to its historical volatility, iShares European Property is 10.97 times less risky than 21Shares Polkadot. It trades about 0.01 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 245.00 in 21Shares Polkadot ETP on September 15, 2024 and sell it today you would earn a total of 199.00 from holding 21Shares Polkadot ETP or generate 81.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares European Property vs. 21Shares Polkadot ETP
Performance |
| Timeline |
| iShares European Property |
| 21Shares Polkadot ETP |
IShares European and 21Shares Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares European and 21Shares Polkadot
The main advantage of trading using opposite IShares European and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares European 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.| IShares European vs. Baloise Holding AG | IShares European vs. 21Shares Polkadot ETP | IShares European vs. UBS ETF MSCI | IShares European vs. BB Biotech AG |
| 21Shares Polkadot vs. Baloise Holding AG | 21Shares Polkadot vs. UBS ETF MSCI | 21Shares Polkadot vs. BB Biotech AG | 21Shares Polkadot vs. Amundi Index Solutions |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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