Correlation Between 21Shares Polkadot and Multi Units

Can any of the company-specific risk be diversified away by investing in both 21Shares Polkadot and Multi Units 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 Multi Units 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 Multi Units Luxembourg, you can compare the effects of market volatilities on 21Shares Polkadot and Multi Units 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 Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21Shares Polkadot and Multi Units.

Diversification Opportunities for 21Shares Polkadot and Multi Units

-0.42

Correlation Coefficient

21Shares Polkadot  Multi Units

Very good diversification

The 3 months correlation between 21Shares and Multi is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and Multi Units Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units Luxembourg 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 Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units Luxembourg has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and Multi Units go up and down completely randomly.

Pair Corralation between 21Shares Polkadot and Multi Units

Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to under-perform the Multi Units. In addition to that, 21Shares Polkadot is 9.6 times more volatile than Multi Units Luxembourg. It trades about -0.08 of its total potential returns per unit of risk. Multi Units Luxembourg is currently generating about -0.12 per unit of volatility. If you would invest  49,013  in Multi Units Luxembourg on October 10, 2024 and sell it today you would lose (912.00) from holding Multi Units Luxembourg or give up 1.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

21Shares Polkadot ETP  vs.  Multi Units Luxembourg

21Shares Polkadot ETP

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Polkadot ETP are ranked lower than 15 (%) 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.

Multi Units Luxembourg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multi Units Luxembourg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Multi Units 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 Multi Units

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

The idea behind 21Shares Polkadot ETP and Multi Units Luxembourg 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.