Correlation Between GraniteShares ETF and FlexShares Morningstar
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and FlexShares Morningstar 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 FlexShares Morningstar 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 FlexShares Morningstar Global, you can compare the effects of market volatilities on GraniteShares ETF and FlexShares Morningstar 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 FlexShares Morningstar. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and FlexShares Morningstar.
Diversification Opportunities for GraniteShares ETF and FlexShares Morningstar
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and FlexShares is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and FlexShares Morningstar Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Morningstar 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 FlexShares Morningstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Morningstar has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and FlexShares Morningstar go up and down completely randomly.
Pair Corralation between GraniteShares ETF and FlexShares Morningstar
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 15.42 times more return on investment than FlexShares Morningstar. However, GraniteShares ETF is 15.42 times more volatile than FlexShares Morningstar Global. It trades about 0.16 of its potential returns per unit of risk. FlexShares Morningstar Global is currently generating about 0.02 per unit of risk. If you would invest 2,334 in GraniteShares ETF Trust on September 2, 2024 and sell it today you would earn a total of 3,004 from holding GraniteShares ETF Trust or generate 128.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. FlexShares Morningstar Global
Performance |
| Timeline |
| GraniteShares ETF Trust |
| FlexShares Morningstar |
GraniteShares ETF and FlexShares Morningstar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and FlexShares Morningstar
The main advantage of trading using opposite GraniteShares ETF and FlexShares Morningstar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, FlexShares Morningstar 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 FlexShares Morningstar will offset losses from the drop in FlexShares Morningstar'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 |
| FlexShares Morningstar vs. Mast Global Battery | FlexShares Morningstar vs. Materials Select Sector | FlexShares Morningstar vs. Vanguard Materials Index | FlexShares Morningstar vs. SPDR SP Metals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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