Correlation Between GraniteShares and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both GraniteShares and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays 10, you can compare the effects of market volatilities on GraniteShares and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and SPDR Barclays.
Diversification Opportunities for GraniteShares and SPDR Barclays
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GraniteShares and SPDR is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and SPDR Barclays 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays 10 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays 10 has no effect on the direction of GraniteShares i.e., GraniteShares and SPDR Barclays go up and down completely randomly.
Pair Corralation between GraniteShares and SPDR Barclays
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 8.17 times more return on investment than SPDR Barclays. However, GraniteShares is 8.17 times more volatile than SPDR Barclays 10. It trades about 0.07 of its potential returns per unit of risk. SPDR Barclays 10 is currently generating about 0.33 per unit of risk. If you would invest 1,745 in GraniteShares 3x Short on November 8, 2024 and sell it today you would earn a total of 91.00 from holding GraniteShares 3x Short or generate 5.21% 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. SPDR Barclays 10
Performance |
| Timeline |
| GraniteShares 3x Short |
| SPDR Barclays 10 |
GraniteShares and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and SPDR Barclays
The main advantage of trading using opposite GraniteShares and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, SPDR Barclays 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 SPDR Barclays will offset losses from the drop in SPDR Barclays' long position.| GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Short |
| SPDR Barclays vs. SPDR Dow Jones | SPDR Barclays vs. SPDR SP Consumer | SPDR Barclays vs. SPDR Morningstar Multi Asset |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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