Correlation Between 21Shares Polkadot and IShares SLI

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

Diversification Opportunities for 21Shares Polkadot and IShares SLI

-0.45

Correlation Coefficient

21Shares Polkadot  IShares SLI

Very good diversification

The 3 months correlation between 21Shares and IShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Polkadot ETP and iShares SLI ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SLI ETF 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 IShares SLI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SLI ETF has no effect on the direction of 21Shares Polkadot i.e., 21Shares Polkadot and IShares SLI go up and down completely randomly.

Pair Corralation between 21Shares Polkadot and IShares SLI

Assuming the 90 days trading horizon 21Shares Polkadot ETP is expected to generate 10.57 times more return on investment than IShares SLI. However, 21Shares Polkadot is 10.57 times more volatile than iShares SLI ETF. It trades about 0.18 of its potential returns per unit of risk. iShares SLI ETF is currently generating about -0.02 per unit of risk. If you would invest  214.00  in 21Shares Polkadot ETP on September 16, 2024 and sell it today you would earn a total of  230.00  from holding 21Shares Polkadot ETP or generate 107.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

21Shares Polkadot ETP  vs.  iShares SLI ETF

21Shares Polkadot ETP

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Polkadot ETP are ranked lower than 14 (%) 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.

iShares SLI ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares SLI ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares SLI is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with 21Shares Polkadot and IShares SLI

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

The idea behind 21Shares Polkadot ETP and iShares SLI ETF 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.