Correlation Between Chargeurs and 21Shares Polkadot

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

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

Diversification Opportunities for Chargeurs and 21Shares Polkadot

-0.46

Correlation Coefficient

Chargeurs  21Shares Polkadot

Very good diversification

The 3 months correlation between Chargeurs and 21Shares is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA 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 Chargeurs 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 Chargeurs SA 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 Chargeurs i.e., Chargeurs and 21Shares Polkadot go up and down completely randomly.

Pair Corralation between Chargeurs and 21Shares Polkadot

Assuming the 90 days trading horizon Chargeurs SA is expected to generate 0.36 times more return on investment than 21Shares Polkadot. However, Chargeurs SA is 2.77 times less risky than 21Shares Polkadot. It trades about 0.29 of its potential returns per unit of risk. 21Shares Polkadot ETP is currently generating about -0.14 per unit of risk. If you would invest  1,046  in Chargeurs SA on November 20, 2024 and sell it today you would earn a total of  154.00  from holding Chargeurs SA or generate 14.72% return on investment over 90 days.

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

Chargeurs SA  vs.  21Shares Polkadot ETP

Chargeurs SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chargeurs SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Chargeurs sustained solid returns over the last few months and may actually be approaching a breakup point.

21Shares Polkadot ETP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Polkadot ETP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 21Shares Polkadot may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Chargeurs and 21Shares Polkadot

The main advantage of trading using opposite Chargeurs and 21Shares Polkadot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chargeurs 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 Chargeurs SA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.