Correlation Between GraniteShares ETF and Global X
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Global X 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 Global X 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 Global X FinTech, you can compare the effects of market volatilities on GraniteShares ETF and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Global X.
Diversification Opportunities for GraniteShares ETF and Global X
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GraniteShares and Global is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Global X FinTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X FinTech 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X FinTech has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Global X go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Global X
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 11.77 times more return on investment than Global X. However, GraniteShares ETF is 11.77 times more volatile than Global X FinTech. It trades about 0.22 of its potential returns per unit of risk. Global X FinTech is currently generating about 0.37 per unit of risk. If you would invest 2,949 in GraniteShares ETF Trust on August 24, 2024 and sell it today you would earn a total of 2,457 from holding GraniteShares ETF Trust or generate 83.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. Global X FinTech
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Global X FinTech |
GraniteShares ETF and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Global X
The main advantage of trading using opposite GraniteShares ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| GraniteShares ETF vs. GraniteShares ETF Trust | GraniteShares ETF vs. Direxion Shares ETF | GraniteShares ETF vs. Direxion Daily AMZN | GraniteShares ETF vs. Direxion Daily GOOGL |
| Global X vs. Invesco DWA Utilities | Global X vs. Invesco Dynamic Large | Global X vs. Invesco Dynamic Large | Global X vs. HUMANA INC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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