Correlation Between GraniteShares and LS 1x
Can any of the company-specific risk be diversified away by investing in both GraniteShares and LS 1x 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 LS 1x 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 LS 1x Coinbase, you can compare the effects of market volatilities on GraniteShares and LS 1x 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 LS 1x. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and LS 1x.
Diversification Opportunities for GraniteShares and LS 1x
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GraniteShares and COI1 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and LS 1x Coinbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS 1x Coinbase 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 LS 1x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS 1x Coinbase has no effect on the direction of GraniteShares i.e., GraniteShares and LS 1x go up and down completely randomly.
Pair Corralation between GraniteShares and LS 1x
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 3.71 times more return on investment than LS 1x. However, GraniteShares is 3.71 times more volatile than LS 1x Coinbase. It trades about 0.16 of its potential returns per unit of risk. LS 1x Coinbase is currently generating about 0.07 per unit of risk. If you would invest 45,365 in GraniteShares 3x Short on November 7, 2024 and sell it today you would earn a total of 18,348 from holding GraniteShares 3x Short or generate 40.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
GraniteShares 3x Short vs. LS 1x Coinbase
Performance |
| Timeline |
| GraniteShares 3x Short |
| LS 1x Coinbase |
GraniteShares and LS 1x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and LS 1x
The main advantage of trading using opposite GraniteShares and LS 1x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, LS 1x 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 LS 1x will offset losses from the drop in LS 1x's long position.| GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Short |
| LS 1x vs. iShares MSCI Japan | LS 1x vs. Amundi EUR High | LS 1x vs. iShares JP Morgan | LS 1x vs. Xtrackers MSCI |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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