Correlation Between GraniteShares and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both GraniteShares and IShares MSCI 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 IShares MSCI 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 iShares MSCI USA, you can compare the effects of market volatilities on GraniteShares and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and IShares MSCI.
Diversification Opportunities for GraniteShares and IShares MSCI
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GraniteShares and IShares is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of GraniteShares i.e., GraniteShares and IShares MSCI go up and down completely randomly.
Pair Corralation between GraniteShares and IShares MSCI
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 103.86 times more return on investment than IShares MSCI. However, GraniteShares is 103.86 times more volatile than iShares MSCI USA. It trades about 0.08 of its potential returns per unit of risk. iShares MSCI USA is currently generating about 0.13 per unit of risk. If you would invest 470.00 in GraniteShares 3x Short on September 1, 2024 and sell it today you would earn a total of 63,755 from holding GraniteShares 3x Short or generate 13564.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 3x Short vs. iShares MSCI USA
Performance |
| Timeline |
| GraniteShares 3x Short |
| iShares MSCI USA |
GraniteShares and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and IShares MSCI
The main advantage of trading using opposite GraniteShares and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 1x Short |
| IShares MSCI vs. GraniteShares 3x Short | IShares MSCI vs. WisdomTree Natural Gas | IShares MSCI vs. Leverage Shares 3x | IShares MSCI 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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