Correlation Between GraniteShares ETF and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and ProShares UltraShort 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 ProShares UltraShort 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 ProShares UltraShort SmallCap600, you can compare the effects of market volatilities on GraniteShares ETF and ProShares UltraShort 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 ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and ProShares UltraShort.
Diversification Opportunities for GraniteShares ETF and ProShares UltraShort
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GraniteShares and ProShares is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and ProShares UltraShort SmallCap6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort 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 ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and ProShares UltraShort go up and down completely randomly.
Pair Corralation between GraniteShares ETF and ProShares UltraShort
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 3.82 times more return on investment than ProShares UltraShort. However, GraniteShares ETF is 3.82 times more volatile than ProShares UltraShort SmallCap600. It trades about 0.11 of its potential returns per unit of risk. ProShares UltraShort SmallCap600 is currently generating about -0.04 per unit of risk. If you would invest 616.00 in GraniteShares ETF Trust on September 2, 2024 and sell it today you would earn a total of 4,722 from holding GraniteShares ETF Trust or generate 766.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. ProShares UltraShort SmallCap6
Performance |
| Timeline |
| GraniteShares ETF Trust |
| ProShares UltraShort |
GraniteShares ETF and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and ProShares UltraShort
The main advantage of trading using opposite GraniteShares ETF and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort'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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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