Correlation Between GraniteShares and UBS ETF
Can any of the company-specific risk be diversified away by investing in both GraniteShares and UBS ETF 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 GraniteShares and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 3x Long and UBS ETF plc, you can compare the effects of market volatilities on GraniteShares and UBS ETF 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 GraniteShares with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and UBS ETF.
Diversification Opportunities for GraniteShares and UBS ETF
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GraniteShares and UBS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Long and UBS ETF plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF plc and GraniteShares 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 GraniteShares 3x Long are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF plc has no effect on the direction of GraniteShares i.e., GraniteShares and UBS ETF go up and down completely randomly.
Pair Corralation between GraniteShares and UBS ETF
Assuming the 90 days trading horizon GraniteShares 3x Long is expected to generate 4.83 times more return on investment than UBS ETF. However, GraniteShares is 4.83 times more volatile than UBS ETF plc. It trades about 0.1 of its potential returns per unit of risk. UBS ETF plc is currently generating about 0.11 per unit of risk. If you would invest 5,577 in GraniteShares 3x Long on September 3, 2024 and sell it today you would earn a total of 2,584 from holding GraniteShares 3x Long or generate 46.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Long vs. UBS ETF plc
Performance |
| Timeline |
| GraniteShares 3x Long |
| UBS ETF plc |
GraniteShares and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and UBS ETF
The main advantage of trading using opposite GraniteShares and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, UBS ETF 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 UBS ETF will offset losses from the drop in UBS ETF's long position.| GraniteShares vs. Vanguard FTSE Developed | GraniteShares vs. Leverage Shares 2x | GraniteShares vs. Amundi Index Solutions | GraniteShares vs. Amundi Index Solutions |
| UBS ETF vs. GraniteShares 3x Short | UBS ETF vs. WisdomTree Natural Gas | UBS ETF vs. Leverage Shares 3x | UBS ETF vs. WisdomTree Natural Gas |
Check out your portfolio center.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.
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