Correlation Between GraniteShares and UBS Barclays
Can any of the company-specific risk be diversified away by investing in both GraniteShares and UBS Barclays 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 Barclays 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 Barclays Liquid, you can compare the effects of market volatilities on GraniteShares and UBS Barclays 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 Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and UBS Barclays.
Diversification Opportunities for GraniteShares and UBS Barclays
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GraniteShares and UBS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Long and UBS Barclays Liquid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Barclays Liquid 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 Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Barclays Liquid has no effect on the direction of GraniteShares i.e., GraniteShares and UBS Barclays go up and down completely randomly.
Pair Corralation between GraniteShares and UBS Barclays
Assuming the 90 days trading horizon GraniteShares 3x Long is expected to generate 9.82 times more return on investment than UBS Barclays. However, GraniteShares is 9.82 times more volatile than UBS Barclays Liquid. It trades about 0.2 of its potential returns per unit of risk. UBS Barclays Liquid is currently generating about -0.11 per unit of risk. If you would invest 7,574 in GraniteShares 3x Long on August 30, 2024 and sell it today you would earn a total of 2,695 from holding GraniteShares 3x Long or generate 35.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Long vs. UBS Barclays Liquid
Performance |
| Timeline |
| GraniteShares 3x Long |
| UBS Barclays Liquid |
GraniteShares and UBS Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and UBS Barclays
The main advantage of trading using opposite GraniteShares and UBS Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, UBS Barclays 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 Barclays will offset losses from the drop in UBS Barclays' long position.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. WisdomTree Natural Gas | GraniteShares vs. Leverage Shares 3x | GraniteShares vs. WisdomTree Natural Gas |
| UBS Barclays vs. Leverage Shares 3x | UBS Barclays vs. Leverage Shares 3x | UBS Barclays vs. GraniteShares 3x Short | UBS Barclays vs. Leverage Shares 3x |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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