Correlation Between GraniteShares ETF and Invesco Taxable
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Invesco Taxable 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 ETF and Invesco Taxable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares ETF Trust and Invesco Taxable Municipal, you can compare the effects of market volatilities on GraniteShares ETF and Invesco Taxable 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 ETF with a short position of Invesco Taxable. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Invesco Taxable.
Diversification Opportunities for GraniteShares ETF and Invesco Taxable
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GraniteShares and Invesco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Invesco Taxable Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Taxable Municipal and GraniteShares ETF 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 ETF Trust are associated (or correlated) with Invesco Taxable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Taxable Municipal has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Invesco Taxable go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Invesco Taxable
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 25.59 times more return on investment than Invesco Taxable. However, GraniteShares ETF is 25.59 times more volatile than Invesco Taxable Municipal. It trades about 0.05 of its potential returns per unit of risk. Invesco Taxable Municipal is currently generating about 0.07 per unit of risk. If you would invest 5,750 in GraniteShares ETF Trust on August 26, 2024 and sell it today you would lose (16.00) from holding GraniteShares ETF Trust or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. Invesco Taxable Municipal
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Invesco Taxable Municipal |
GraniteShares ETF and Invesco Taxable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Invesco Taxable
The main advantage of trading using opposite GraniteShares ETF and Invesco Taxable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, Invesco Taxable 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 Invesco Taxable will offset losses from the drop in Invesco Taxable's long position.| GraniteShares ETF vs. Direxion Daily SP | GraniteShares ETF vs. Direxion Daily Semiconductor | GraniteShares ETF vs. Direxion Daily Semiconductor |
| Invesco Taxable vs. FlexShares Credit Scored Corporate | Invesco Taxable vs. FlexShares Disciplined Duration | Invesco Taxable vs. FlexShares Quality Large | Invesco Taxable vs. First Trust Emerging |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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