Correlation Between GraniteShares and Xtrackers USD
Can any of the company-specific risk be diversified away by investing in both GraniteShares and Xtrackers USD 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 Xtrackers USD 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 Xtrackers USD Corporate, you can compare the effects of market volatilities on GraniteShares and Xtrackers USD 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 Xtrackers USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and Xtrackers USD.
Diversification Opportunities for GraniteShares and Xtrackers USD
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and Xtrackers is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and Xtrackers USD Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers USD Corporate 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 Xtrackers USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers USD Corporate has no effect on the direction of GraniteShares i.e., GraniteShares and Xtrackers USD go up and down completely randomly.
Pair Corralation between GraniteShares and Xtrackers USD
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 162.24 times more return on investment than Xtrackers USD. However, GraniteShares is 162.24 times more volatile than Xtrackers USD Corporate. It trades about 0.04 of its potential returns per unit of risk. Xtrackers USD Corporate is currently generating about 0.03 per unit of risk. If you would invest 3,930 in GraniteShares 3x Short on September 12, 2024 and sell it today you would lose (2,427) from holding GraniteShares 3x Short or give up 61.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. Xtrackers USD Corporate
Performance |
| Timeline |
| GraniteShares 3x Short |
| Xtrackers USD Corporate |
GraniteShares and Xtrackers USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and Xtrackers USD
The main advantage of trading using opposite GraniteShares and Xtrackers USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, Xtrackers USD 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 Xtrackers USD will offset losses from the drop in Xtrackers USD's long position.| GraniteShares vs. WisdomTree Natural Gas | GraniteShares vs. Leverage Shares 3x | GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. WisdomTree Natural Gas |
| Xtrackers USD vs. Vanguard FTSE Developed | Xtrackers USD vs. Leverage Shares 2x | Xtrackers USD vs. Amundi Index Solutions | Xtrackers USD vs. Amundi Index Solutions |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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