Correlation Between 21Shares Bytetree and Invesco EURO

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

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

Diversification Opportunities for 21Shares Bytetree and Invesco EURO

-0.39

Correlation Coefficient

21Shares Bytetree  Invesco EURO

Very good diversification

The 3 months correlation between 21Shares and Invesco is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding 21Shares Bytetree BOLD and Invesco EURO STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco EURO STOXX and 21Shares Bytetree 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 Bytetree BOLD are associated (or correlated) with Invesco EURO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco EURO STOXX has no effect on the direction of 21Shares Bytetree i.e., 21Shares Bytetree and Invesco EURO go up and down completely randomly.

Pair Corralation between 21Shares Bytetree and Invesco EURO

Assuming the 90 days trading horizon 21Shares Bytetree is expected to generate 2.51 times less return on investment than Invesco EURO. In addition to that, 21Shares Bytetree is 1.21 times more volatile than Invesco EURO STOXX. It trades about 0.07 of its total potential returns per unit of risk. Invesco EURO STOXX is currently generating about 0.21 per unit of volatility. If you would invest  11,782  in Invesco EURO STOXX on September 28, 2024 and sell it today you would earn a total of  370.00  from holding Invesco EURO STOXX or generate 3.14% return on investment over 90 days.

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

21Shares Bytetree BOLD  vs.  Invesco EURO STOXX

21Shares Bytetree BOLD

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Bytetree BOLD are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, 21Shares Bytetree showed solid returns over the last few months and may actually be approaching a breakup point.

Invesco EURO STOXX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco EURO STOXX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Invesco EURO is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with 21Shares Bytetree and Invesco EURO

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

The idea behind 21Shares Bytetree BOLD and Invesco EURO STOXX 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 Anywhere module to track or share privately all of your investments from the convenience of any device.