Correlation Between GraniteShares and IShares Nasdaq
Can any of the company-specific risk be diversified away by investing in both GraniteShares and IShares Nasdaq 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 IShares Nasdaq 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 iShares Nasdaq Biotechnology, you can compare the effects of market volatilities on GraniteShares and IShares Nasdaq 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 IShares Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and IShares Nasdaq.
Diversification Opportunities for GraniteShares and IShares Nasdaq
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and IShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and iShares Nasdaq Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Nasdaq Biote 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 IShares Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Nasdaq Biote has no effect on the direction of GraniteShares i.e., GraniteShares and IShares Nasdaq go up and down completely randomly.
Pair Corralation between GraniteShares and IShares Nasdaq
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 3.28 times more return on investment than IShares Nasdaq. However, GraniteShares is 3.28 times more volatile than iShares Nasdaq Biotechnology. It trades about 0.1 of its potential returns per unit of risk. iShares Nasdaq Biotechnology is currently generating about -0.07 per unit of risk. If you would invest 1,704 in GraniteShares 3x Short on August 28, 2024 and sell it today you would earn a total of 157.00 from holding GraniteShares 3x Short or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. iShares Nasdaq Biotechnology
Performance |
| Timeline |
| GraniteShares 3x Short |
| iShares Nasdaq Biote |
GraniteShares and IShares Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and IShares Nasdaq
The main advantage of trading using opposite GraniteShares and IShares Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, IShares Nasdaq 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 IShares Nasdaq will offset losses from the drop in IShares Nasdaq's long position.| GraniteShares vs. WisdomTree SP 500 | GraniteShares vs. WisdomTree Silver 3x | GraniteShares vs. Lyxor 10Y Inflation | GraniteShares vs. GraniteShares 3x Short |
| IShares Nasdaq vs. iShares MSCI Japan | IShares Nasdaq vs. iShares JP Morgan | IShares Nasdaq vs. iShares MSCI Europe | IShares Nasdaq vs. iShares Global Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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