Correlation Between GraniteShares ETF and First Trust
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF 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 ETF 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 ETF Trust and First Trust TCW, you can compare the effects of market volatilities on GraniteShares ETF 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 ETF with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and First Trust.
Diversification Opportunities for GraniteShares ETF and First Trust
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GraniteShares and First is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and First Trust TCW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust TCW 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 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 TCW has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and First Trust go up and down completely randomly.
Pair Corralation between GraniteShares ETF and First Trust
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 54.76 times more return on investment than First Trust. However, GraniteShares ETF is 54.76 times more volatile than First Trust TCW. It trades about 0.21 of its potential returns per unit of risk. First Trust TCW is currently generating about -0.13 per unit of risk. If you would invest 3,444 in GraniteShares ETF Trust on August 27, 2024 and sell it today you would earn a total of 2,290 from holding GraniteShares ETF Trust or generate 66.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. First Trust TCW
Performance |
| Timeline |
| GraniteShares ETF Trust |
| First Trust TCW |
GraniteShares ETF and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and First Trust
The main advantage of trading using opposite GraniteShares ETF and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF 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 ETF vs. Direxion Daily SP | GraniteShares ETF vs. Direxion Daily Semiconductor | GraniteShares ETF vs. Direxion Daily Semiconductor |
| First Trust vs. First Trust Low | First Trust vs. First Trust Enhanced | First Trust vs. First Trust Tactical | First Trust vs. First Trust Managed |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stocks Directory Find actively traded stocks across global markets |