Correlation Between GraniteShares and Invesco Markets
Can any of the company-specific risk be diversified away by investing in both GraniteShares and Invesco Markets 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 Invesco Markets 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 Invesco Markets II, you can compare the effects of market volatilities on GraniteShares and Invesco Markets 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 Invesco Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and Invesco Markets.
Diversification Opportunities for GraniteShares and Invesco Markets
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GraniteShares and Invesco is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Long and Invesco Markets II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Markets II 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 Invesco Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Markets II has no effect on the direction of GraniteShares i.e., GraniteShares and Invesco Markets go up and down completely randomly.
Pair Corralation between GraniteShares and Invesco Markets
Assuming the 90 days trading horizon GraniteShares 3x Long is expected to generate 3.55 times more return on investment than Invesco Markets. However, GraniteShares is 3.55 times more volatile than Invesco Markets II. It trades about 0.2 of its potential returns per unit of risk. Invesco Markets II is currently generating about -0.12 per unit of risk. If you would invest 2,956 in GraniteShares 3x Long on October 31, 2024 and sell it today you would earn a total of 4,255 from holding GraniteShares 3x Long or generate 143.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Long vs. Invesco Markets II
Performance |
| Timeline |
| GraniteShares 3x Long |
| Invesco Markets II |
GraniteShares and Invesco Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and Invesco Markets
The main advantage of trading using opposite GraniteShares and Invesco Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, Invesco Markets 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 Invesco Markets will offset losses from the drop in Invesco Markets' long position.| GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Short |
| Invesco Markets vs. Leverage Shares 3x | Invesco Markets vs. WisdomTree Natural Gas | Invesco Markets vs. Leverage Shares 3x | Invesco Markets vs. SP 500 VIX |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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