Correlation Between 21shares Core and OShares Europe

Can any of the company-specific risk be diversified away by investing in both 21shares Core and OShares Europe 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 Core and OShares Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 21shares Core Ethereum and OShares Europe Quality, you can compare the effects of market volatilities on 21shares Core and OShares Europe 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 Core with a short position of OShares Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of 21shares Core and OShares Europe.

Diversification Opportunities for 21shares Core and OShares Europe

-0.44

Correlation Coefficient

21shares Core  OShares Europe

Very good diversification

The 3 months correlation between 21shares and OShares is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding 21shares Core Ethereum and OShares Europe Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OShares Europe Quality and 21shares Core 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 Core Ethereum are associated (or correlated) with OShares Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OShares Europe Quality has no effect on the direction of 21shares Core i.e., 21shares Core and OShares Europe go up and down completely randomly.

Pair Corralation between 21shares Core and OShares Europe

Given the investment horizon of 90 days 21shares Core Ethereum is expected to generate 5.42 times more return on investment than OShares Europe. However, 21shares Core is 5.42 times more volatile than OShares Europe Quality. It trades about 0.03 of its potential returns per unit of risk. OShares Europe Quality is currently generating about 0.04 per unit of risk. If you would invest  1,729  in 21shares Core Ethereum on October 23, 2024 and sell it today you would earn a total of  31.00  from holding 21shares Core Ethereum or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	25.3%
Values	Daily Returns

21shares Core Ethereum  vs.  OShares Europe Quality

21shares Core Ethereum

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 21shares Core Ethereum are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, 21shares Core demonstrated solid returns over the last few months and may actually be approaching a breakup point.

OShares Europe Quality

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with 21shares Core and OShares Europe

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

The idea behind 21shares Core Ethereum and OShares Europe Quality 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..