Correlation Between GraniteShares and WisdomTree Silver
Can any of the company-specific risk be diversified away by investing in both GraniteShares and WisdomTree Silver 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 WisdomTree Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 3x Short and WisdomTree Silver 3x, you can compare the effects of market volatilities on GraniteShares and WisdomTree Silver 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 WisdomTree Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and WisdomTree Silver.
Diversification Opportunities for GraniteShares and WisdomTree Silver
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and WisdomTree is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and WisdomTree Silver 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Silver 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 Short are associated (or correlated) with WisdomTree Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Silver has no effect on the direction of GraniteShares i.e., GraniteShares and WisdomTree Silver go up and down completely randomly.
Pair Corralation between GraniteShares and WisdomTree Silver
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 0.71 times more return on investment than WisdomTree Silver. However, GraniteShares 3x Short is 1.41 times less risky than WisdomTree Silver. It trades about -0.05 of its potential returns per unit of risk. WisdomTree Silver 3x is currently generating about -0.15 per unit of risk. If you would invest 1,850 in GraniteShares 3x Short on September 2, 2024 and sell it today you would lose (92.00) from holding GraniteShares 3x Short or give up 4.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. WisdomTree Silver 3x
Performance |
| Timeline |
| GraniteShares 3x Short |
| WisdomTree Silver |
GraniteShares and WisdomTree Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and WisdomTree Silver
The main advantage of trading using opposite GraniteShares and WisdomTree Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, WisdomTree Silver 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 WisdomTree Silver will offset losses from the drop in WisdomTree Silver's long position.| GraniteShares vs. WisdomTree Natural Gas | GraniteShares vs. Leverage Shares 3x | GraniteShares vs. WisdomTree Natural Gas | GraniteShares vs. WisdomTree SP 500 |
| WisdomTree Silver vs. WisdomTree Zinc | WisdomTree Silver vs. WisdomTree Brent Crude | WisdomTree Silver vs. WisdomTree Aluminium 2x | WisdomTree Silver vs. WisdomTree Enhanced Commodity |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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