Correlation Between GraniteShares and SP 500
Can any of the company-specific risk be diversified away by investing in both GraniteShares and SP 500 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 SP 500 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 SP 500 VIX, you can compare the effects of market volatilities on GraniteShares and SP 500 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 SP 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and SP 500.
Diversification Opportunities for GraniteShares and SP 500
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GraniteShares and VILX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and SP 500 VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP 500 VIX 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 SP 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP 500 VIX has no effect on the direction of GraniteShares i.e., GraniteShares and SP 500 go up and down completely randomly.
Pair Corralation between GraniteShares and SP 500
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 0.4 times more return on investment than SP 500. However, GraniteShares 3x Short is 2.53 times less risky than SP 500. It trades about -0.17 of its potential returns per unit of risk. SP 500 VIX is currently generating about -0.27 per unit of risk. If you would invest 1,922 in GraniteShares 3x Short on September 5, 2024 and sell it today you would lose (255.00) from holding GraniteShares 3x Short or give up 13.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. SP 500 VIX
Performance |
| Timeline |
| GraniteShares 3x Short |
| SP 500 VIX |
GraniteShares and SP 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and SP 500
The main advantage of trading using opposite GraniteShares and SP 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, SP 500 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 SP 500 will offset losses from the drop in SP 500's long position.| GraniteShares vs. Vanguard FTSE Developed | GraniteShares vs. Leverage Shares 2x | GraniteShares vs. Amundi Index Solutions | GraniteShares vs. Amundi Index Solutions |
| SP 500 vs. GraniteShares 3x Short | SP 500 vs. WisdomTree Natural Gas | SP 500 vs. Leverage Shares 3x | SP 500 vs. WisdomTree Natural Gas |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |