Correlation Between IShares SP and 21Shares Polkadot
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 SP 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 SP 500 and 21Shares Polkadot ETP, you can compare the effects of market volatilities on IShares SP 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 SP with a short position of 21Shares Polkadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and 21Shares Polkadot.
Diversification Opportunities for IShares SP and 21Shares Polkadot
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and 21Shares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 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 SP 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 SP 500 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 SP i.e., IShares SP and 21Shares Polkadot go up and down completely randomly.
Pair Corralation between IShares SP and 21Shares Polkadot
Assuming the 90 days trading horizon IShares SP is expected to generate 2.49 times less return on investment than 21Shares Polkadot. But when comparing it to its historical volatility, iShares SP 500 is 6.91 times less risky than 21Shares Polkadot. It trades about 0.14 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 261.00 in 21Shares Polkadot ETP on August 31, 2024 and sell it today you would earn a total of 145.00 from holding 21Shares Polkadot ETP or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.95% |
| Values | Daily Returns |
iShares SP 500 vs. 21Shares Polkadot ETP
Performance |
| Timeline |
| iShares SP 500 |
| 21Shares Polkadot ETP |
IShares SP and 21Shares Polkadot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and 21Shares Polkadot
The main advantage of trading using opposite IShares SP and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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 SP vs. iShares Corp Bond | IShares SP vs. iShares Emerging Asia | IShares SP vs. iShares MSCI Global | IShares SP vs. iShares VII PLC |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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