Correlation Between 21Shares Polkadot and Autoneum Holding

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

Diversification Opportunities for 21Shares Polkadot and Autoneum Holding

-0.42

Correlation Coefficient

21Shares Polkadot  Autoneum Holding

Very good diversification

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

Pair Corralation between 21Shares Polkadot and Autoneum Holding

Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to under-perform the Autoneum Holding. In addition to that, 21Shares Polkadot is 8.83 times more volatile than Autoneum Holding AG. It trades about -0.15 of its total potential returns per unit of risk. Autoneum Holding AG is currently generating about 0.56 per unit of volatility. If you would invest  10,820  in Autoneum Holding AG on October 7, 2024 and sell it today you would earn a total of  1,080  from holding Autoneum Holding AG or generate 9.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

21Shares Polkadot ETP  vs.  Autoneum Holding AG

21Shares Polkadot ETP

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Polkadot ETP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, 21Shares Polkadot showed solid returns over the last few months and may actually be approaching a breakup point.

Autoneum Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Autoneum Holding AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Autoneum Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with 21Shares Polkadot and Autoneum Holding

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

The idea behind 21Shares Polkadot ETP and Autoneum Holding AG 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.