Correlation Between GraniteShares and PIMCO Sterling
Can any of the company-specific risk be diversified away by investing in both GraniteShares and PIMCO Sterling 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 Sterling 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 Sterling Short, you can compare the effects of market volatilities on GraniteShares and PIMCO Sterling 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 Sterling. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and PIMCO Sterling.
Diversification Opportunities for GraniteShares and PIMCO Sterling
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GraniteShares and PIMCO is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and PIMCO Sterling Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Sterling 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 Sterling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Sterling Short has no effect on the direction of GraniteShares i.e., GraniteShares and PIMCO Sterling go up and down completely randomly.
Pair Corralation between GraniteShares and PIMCO Sterling
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 2027.18 times more return on investment than PIMCO Sterling. However, GraniteShares is 2027.18 times more volatile than PIMCO Sterling Short. It trades about 0.04 of its potential returns per unit of risk. PIMCO Sterling Short is currently generating about 0.67 per unit of risk. If you would invest 11,800 in GraniteShares 3x Short on September 12, 2024 and sell it today you would earn a total of 51,875 from holding GraniteShares 3x Short or generate 439.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.4% |
| Values | Daily Returns |
GraniteShares 3x Short vs. PIMCO Sterling Short
Performance |
| Timeline |
| GraniteShares 3x Short |
| PIMCO Sterling Short |
GraniteShares and PIMCO Sterling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and PIMCO Sterling
The main advantage of trading using opposite GraniteShares and PIMCO Sterling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, PIMCO Sterling 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 Sterling will offset losses from the drop in PIMCO Sterling's long position.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 1x Short |
| PIMCO Sterling vs. GraniteShares 3x Short | PIMCO Sterling vs. WisdomTree Natural Gas | PIMCO Sterling vs. Leverage Shares 3x | PIMCO Sterling 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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