Correlation Between GraniteShares ETF and Invesco ESG
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Invesco ESG 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 ESG 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 ESG NASDAQ, you can compare the effects of market volatilities on GraniteShares ETF and Invesco ESG 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 ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Invesco ESG.
Diversification Opportunities for GraniteShares ETF and Invesco ESG
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GraniteShares and Invesco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Invesco ESG NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco ESG NASDAQ 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 ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco ESG NASDAQ has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Invesco ESG go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Invesco ESG
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 10.51 times more return on investment than Invesco ESG. However, GraniteShares ETF is 10.51 times more volatile than Invesco ESG NASDAQ. It trades about 0.06 of its potential returns per unit of risk. Invesco ESG NASDAQ is currently generating about 0.1 per unit of risk. If you would invest 5,100 in GraniteShares ETF Trust on September 1, 2024 and sell it today you would earn a total of 238.00 from holding GraniteShares ETF Trust or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. Invesco ESG NASDAQ
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Invesco ESG NASDAQ |
GraniteShares ETF and Invesco ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Invesco ESG
The main advantage of trading using opposite GraniteShares ETF and Invesco ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, Invesco ESG 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 ESG will offset losses from the drop in Invesco ESG'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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