Correlation Between 21Shares Polkadot and Courtois

Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and Courtois 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 21Shares Polkadot and Courtois into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 21Shares Polkadot ETP and Courtois SA, you can compare the effects of market volatilities on 21Shares Polkadot and Courtois 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 21Shares Polkadot with a short position of Courtois. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and Courtois.

Diversification Opportunities for 21Shares Polkadot and Courtois

-0.59

Correlation Coefficient

21Shares Polkadot  Courtois

Excellent diversification

The 3 months correlation between 21Shares and Courtois is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and Courtois SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Courtois SA and 21Shares Polkadot 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 21Shares Polkadot ETP are associated (or correlated) with Courtois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Courtois SA has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and Courtois go up and down completely randomly.

Pair Corralation between 21Shares Polkadot and Courtois

Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to under-perform the Courtois. In addition to that, 21Shares Polkadot is 5.27 times more volatile than Courtois SA. It trades about -0.09 of its total potential returns per unit of risk. Courtois SA is currently generating about 0.01 per unit of volatility. If you would invest  12,000  in Courtois SA on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Courtois SA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

21Shares Polkadot ETP  vs.  Courtois SA

21Shares Polkadot ETP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Polkadot ETP are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 21Shares Polkadot sustained solid returns over the last few months and may actually be approaching a breakup point.

Courtois SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Courtois SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Courtois is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 21Shares Polkadot and Courtois

The main advantage of trading using opposite 21Shares Polkadot and Courtois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 21Shares Polkadot position performs unexpectedly, Courtois 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 Courtois will offset losses from the drop in Courtois' long position.

The idea behind 21Shares Polkadot ETP and Courtois SA 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.