Correlation Between GraniteShares and Invesco AT1
Can any of the company-specific risk be diversified away by investing in both GraniteShares and Invesco AT1 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 AT1 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 Invesco AT1 Capital, you can compare the effects of market volatilities on GraniteShares and Invesco AT1 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 AT1. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and Invesco AT1.
Diversification Opportunities for GraniteShares and Invesco AT1
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GraniteShares and Invesco is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and Invesco AT1 Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco AT1 Capital 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 Invesco AT1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco AT1 Capital has no effect on the direction of GraniteShares i.e., GraniteShares and Invesco AT1 go up and down completely randomly.
Pair Corralation between GraniteShares and Invesco AT1
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 17.88 times more return on investment than Invesco AT1. However, GraniteShares is 17.88 times more volatile than Invesco AT1 Capital. It trades about 0.05 of its potential returns per unit of risk. Invesco AT1 Capital is currently generating about 0.04 per unit of risk. If you would invest 1,691 in GraniteShares 3x Short on August 30, 2024 and sell it today you would earn a total of 49.00 from holding GraniteShares 3x Short or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. Invesco AT1 Capital
Performance |
| Timeline |
| GraniteShares 3x Short |
| Invesco AT1 Capital |
GraniteShares and Invesco AT1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and Invesco AT1
The main advantage of trading using opposite GraniteShares and Invesco AT1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, Invesco AT1 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 AT1 will offset losses from the drop in Invesco AT1's long position.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 1x Short |
| Invesco AT1 vs. Invesco MSCI Emerging | Invesco AT1 vs. Invesco EURO STOXX | Invesco AT1 vs. Invesco Markets Plc | Invesco AT1 vs. Invesco FTSE RAFI |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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