Correlation Between Vanguard Total and GraniteShares
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and GraniteShares 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 Vanguard Total and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and GraniteShares 2x Long, you can compare the effects of market volatilities on Vanguard Total and GraniteShares 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 Vanguard Total with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and GraniteShares.
Diversification Opportunities for Vanguard Total and GraniteShares
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vanguard and GraniteShares is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and GraniteShares 2x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 2x Long and Vanguard Total 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 Vanguard Total Bond are associated (or correlated) with GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 2x Long has no effect on the direction of Vanguard Total i.e., Vanguard Total and GraniteShares go up and down completely randomly.
Pair Corralation between Vanguard Total and GraniteShares
Considering the 90-day investment horizon Vanguard Total is expected to generate 1.83 times less return on investment than GraniteShares. But when comparing it to its historical volatility, Vanguard Total Bond is 21.75 times less risky than GraniteShares. It trades about 0.31 of its potential returns per unit of risk. GraniteShares 2x Long is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,563 in GraniteShares 2x Long on December 1, 2024 and sell it today you would lose (15.00) from holding GraniteShares 2x Long or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Total Bond vs. GraniteShares 2x Long
Performance |
| Timeline |
| Vanguard Total Bond |
| GraniteShares 2x Long |
Vanguard Total and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and GraniteShares
The main advantage of trading using opposite Vanguard Total and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, GraniteShares 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 GraniteShares will offset losses from the drop in GraniteShares' long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Stock | Vanguard Total vs. Vanguard Real Estate |
| GraniteShares vs. Strategy Shares | GraniteShares vs. Freedom Day Dividend | GraniteShares vs. Franklin Templeton ETF | GraniteShares vs. iShares MSCI China |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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