Correlation Between GraniteShares Bloomberg and First Trust
Can any of the company-specific risk be diversified away by investing in both GraniteShares Bloomberg and First Trust 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 Bloomberg and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares Bloomberg Commodity and First Trust Alternative, you can compare the effects of market volatilities on GraniteShares Bloomberg and First Trust 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 Bloomberg with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares Bloomberg and First Trust.
Diversification Opportunities for GraniteShares Bloomberg and First Trust
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and First is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares Bloomberg Commod and First Trust Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Alternative and GraniteShares Bloomberg 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 Bloomberg Commodity are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Alternative has no effect on the direction of GraniteShares Bloomberg i.e., GraniteShares Bloomberg and First Trust go up and down completely randomly.
Pair Corralation between GraniteShares Bloomberg and First Trust
Given the investment horizon of 90 days GraniteShares Bloomberg Commodity is expected to generate 1.44 times more return on investment than First Trust. However, GraniteShares Bloomberg is 1.44 times more volatile than First Trust Alternative. It trades about 0.02 of its potential returns per unit of risk. First Trust Alternative is currently generating about 0.03 per unit of risk. If you would invest 1,952 in GraniteShares Bloomberg Commodity on August 29, 2024 and sell it today you would earn a total of 64.00 from holding GraniteShares Bloomberg Commodity or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares Bloomberg Commod vs. First Trust Alternative
Performance |
| Timeline |
| GraniteShares Bloomberg |
| First Trust Alternative |
GraniteShares Bloomberg and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares Bloomberg and First Trust
The main advantage of trading using opposite GraniteShares Bloomberg and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares Bloomberg position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| GraniteShares Bloomberg vs. abrdn Bloomberg All | GraniteShares Bloomberg vs. iShares Bloomberg Roll | GraniteShares Bloomberg vs. abrdn Bloomberg All | GraniteShares Bloomberg vs. iShares GSCI Commodity |
| First Trust vs. First Trust Emerging | First Trust vs. First Trust Income | First Trust vs. First Trust SSI | First Trust vs. First Trust Indxx |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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