Correlation Between GraniteShares ETF and Invesco SP
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Invesco SP 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 SP 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 SP MidCap, you can compare the effects of market volatilities on GraniteShares ETF and Invesco SP 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 SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Invesco SP.
Diversification Opportunities for GraniteShares ETF and Invesco SP
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GraniteShares and Invesco is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Invesco SP MidCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP MidCap 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 SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP MidCap has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Invesco SP go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Invesco SP
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 8.45 times more return on investment than Invesco SP. However, GraniteShares ETF is 8.45 times more volatile than Invesco SP MidCap. It trades about 0.1 of its potential returns per unit of risk. Invesco SP MidCap is currently generating about 0.07 per unit of risk. If you would invest 565.00 in GraniteShares ETF Trust on August 30, 2024 and sell it today you would earn a total of 5,349 from holding GraniteShares ETF Trust or generate 946.73% 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 SP MidCap
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Invesco SP MidCap |
GraniteShares ETF and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Invesco SP
The main advantage of trading using opposite GraniteShares ETF and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, Invesco SP 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 SP will offset losses from the drop in Invesco SP's long position.| GraniteShares ETF vs. ABIVAX Socit Anonyme | GraniteShares ETF vs. Morningstar Unconstrained Allocation | GraniteShares ETF vs. SPACE | GraniteShares ETF vs. Knife River |
| Invesco SP vs. Invesco SP SmallCap | Invesco SP vs. Invesco SP MidCap | Invesco SP vs. Invesco SP 500 | Invesco SP vs. Invesco SP SmallCap |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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