Correlation Between GraniteShares and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both GraniteShares and Franklin FTSE 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 Franklin FTSE 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 Franklin FTSE Asia, you can compare the effects of market volatilities on GraniteShares and Franklin FTSE 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 Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and Franklin FTSE.
Diversification Opportunities for GraniteShares and Franklin FTSE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GraniteShares and Franklin is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and Franklin FTSE Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Asia 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 Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Asia has no effect on the direction of GraniteShares i.e., GraniteShares and Franklin FTSE go up and down completely randomly.
Pair Corralation between GraniteShares and Franklin FTSE
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 9.98 times more return on investment than Franklin FTSE. However, GraniteShares is 9.98 times more volatile than Franklin FTSE Asia. It trades about 0.16 of its potential returns per unit of risk. Franklin FTSE Asia is currently generating about 0.16 per unit of risk. If you would invest 53,625 in GraniteShares 3x Short on September 13, 2024 and sell it today you would earn a total of 10,050 from holding GraniteShares 3x Short or generate 18.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. Franklin FTSE Asia
Performance |
| Timeline |
| GraniteShares 3x Short |
| Franklin FTSE Asia |
GraniteShares and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and Franklin FTSE
The main advantage of trading using opposite GraniteShares and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| GraniteShares vs. WisdomTree Natural Gas | GraniteShares vs. Leverage Shares 3x | GraniteShares vs. WisdomTree Natural Gas | GraniteShares vs. WisdomTree SP 500 |
| Franklin FTSE vs. WisdomTree Natural Gas | Franklin FTSE vs. Leverage Shares 3x | Franklin FTSE vs. GraniteShares 3x Short | Franklin FTSE 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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