Correlation Between Granite 3x and Archos
Can any of the company-specific risk be diversified away by investing in both Granite 3x and Archos 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 Granite 3x and Archos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and Archos, you can compare the effects of market volatilities on Granite 3x and Archos 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 Granite 3x with a short position of Archos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Archos.
Diversification Opportunities for Granite 3x and Archos
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Granite and Archos is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Archos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archos and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with Archos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archos has no effect on the direction of Granite 3x i.e., Granite 3x and Archos go up and down completely randomly.
Pair Corralation between Granite 3x and Archos
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Archos. But the etf apears to be less risky and, when comparing its historical volatility, Granite 3x LVMH is 2.02 times less risky than Archos. The etf trades about -0.07 of its potential returns per unit of risk. The Archos is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 246.00 in Archos on September 12, 2024 and sell it today you would lose (234.00) from holding Archos or give up 95.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.44% |
| Values | Daily Returns |
Granite 3x LVMH vs. Archos
Performance |
| Timeline |
| Granite 3x LVMH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Archos |
Granite 3x and Archos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Archos
The main advantage of trading using opposite Granite 3x and Archos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Archos 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 Archos will offset losses from the drop in Archos' long position.The idea behind Granite 3x LVMH and Archos 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.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 CEOs Directory module to screen CEOs from public companies around the world.
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