Correlation Between AST Groupe and 21Shares Polkadot

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

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

Diversification Opportunities for AST Groupe and 21Shares Polkadot

0.0

Correlation Coefficient

AST Groupe  21Shares Polkadot

Pay attention - limited upside

The 3 months correlation between AST and 21Shares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AST Groupe 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 AST Groupe 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 AST Groupe 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 AST Groupe i.e., AST Groupe and 21Shares Polkadot go up and down completely randomly.

Pair Corralation between AST Groupe and 21Shares Polkadot

Assuming the 90 days trading horizon AST Groupe is expected to under-perform the 21Shares Polkadot. In addition to that, AST Groupe is 1.18 times more volatile than 21Shares Polkadot ETP. It trades about -0.04 of its total potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about 0.03 per unit of volatility. If you would invest  283.00  in 21Shares Polkadot ETP on October 12, 2024 and sell it today you would earn a total of  71.00  from holding 21Shares Polkadot ETP or generate 25.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

AST Groupe  vs.  21Shares Polkadot ETP

AST Groupe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AST Groupe has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, AST Groupe is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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. Despite somewhat weak basic indicators, 21Shares Polkadot sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AST Groupe and 21Shares Polkadot

The main advantage of trading using opposite AST Groupe and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AST Groupe 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.

The idea behind AST Groupe and 21Shares Polkadot ETP 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..