Correlation Between GraniteShares and WisdomTree Grains
Can any of the company-specific risk be diversified away by investing in both GraniteShares and WisdomTree Grains 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 WisdomTree Grains 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 WisdomTree Grains, you can compare the effects of market volatilities on GraniteShares and WisdomTree Grains 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 WisdomTree Grains. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and WisdomTree Grains.
Diversification Opportunities for GraniteShares and WisdomTree Grains
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and WisdomTree is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and WisdomTree Grains in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Grains 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 WisdomTree Grains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Grains has no effect on the direction of GraniteShares i.e., GraniteShares and WisdomTree Grains go up and down completely randomly.
Pair Corralation between GraniteShares and WisdomTree Grains
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the WisdomTree Grains. In addition to that, GraniteShares is 9.84 times more volatile than WisdomTree Grains. It trades about -0.09 of its total potential returns per unit of risk. WisdomTree Grains is currently generating about 0.02 per unit of volatility. If you would invest 28,850 in WisdomTree Grains on November 28, 2024 and sell it today you would earn a total of 95.00 from holding WisdomTree Grains or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. WisdomTree Grains
Performance |
| Timeline |
| GraniteShares 3x Short |
| WisdomTree Grains |
GraniteShares and WisdomTree Grains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and WisdomTree Grains
The main advantage of trading using opposite GraniteShares and WisdomTree Grains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, WisdomTree Grains 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 WisdomTree Grains will offset losses from the drop in WisdomTree Grains' long position.| GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Short |
| WisdomTree Grains vs. WisdomTree Zinc | WisdomTree Grains vs. WisdomTree Brent Crude | WisdomTree Grains vs. WisdomTree Aluminium 2x | WisdomTree Grains vs. WisdomTree Enhanced Commodity |
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.
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