Correlation Between GraniteShares and PIMCO Dollar
Can any of the company-specific risk be diversified away by investing in both GraniteShares and PIMCO Dollar 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 PIMCO Dollar 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 PIMCO Dollar Short, you can compare the effects of market volatilities on GraniteShares and PIMCO Dollar 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 PIMCO Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and PIMCO Dollar.
Diversification Opportunities for GraniteShares and PIMCO Dollar
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GraniteShares and PIMCO is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and PIMCO Dollar Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Dollar Short 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 PIMCO Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Dollar Short has no effect on the direction of GraniteShares i.e., GraniteShares and PIMCO Dollar go up and down completely randomly.
Pair Corralation between GraniteShares and PIMCO Dollar
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the PIMCO Dollar. In addition to that, GraniteShares is 210.11 times more volatile than PIMCO Dollar Short. It trades about -0.03 of its total potential returns per unit of risk. PIMCO Dollar Short is currently generating about 0.69 per unit of volatility. If you would invest 10,932 in PIMCO Dollar Short on September 2, 2024 and sell it today you would earn a total of 46.00 from holding PIMCO Dollar Short or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GraniteShares 3x Short vs. PIMCO Dollar Short
Performance |
| Timeline |
| GraniteShares 3x Short |
| PIMCO Dollar Short |
GraniteShares and PIMCO Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and PIMCO Dollar
The main advantage of trading using opposite GraniteShares and PIMCO Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, PIMCO Dollar 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 PIMCO Dollar will offset losses from the drop in PIMCO Dollar's long position.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 1x Short |
| PIMCO Dollar vs. GraniteShares 3x Short | PIMCO Dollar vs. WisdomTree Natural Gas | PIMCO Dollar vs. Leverage Shares 3x | PIMCO Dollar 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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