Correlation Between GraniteShares ETF and Defiance Daily
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Defiance Daily 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 Defiance Daily 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 Defiance Daily Target, you can compare the effects of market volatilities on GraniteShares ETF and Defiance Daily 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 Defiance Daily. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Defiance Daily.
Diversification Opportunities for GraniteShares ETF and Defiance Daily
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GraniteShares and Defiance is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Defiance Daily Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Daily Target 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 Defiance Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Daily Target has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Defiance Daily go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Defiance Daily
Given the investment horizon of 90 days GraniteShares ETF is expected to generate 1.67 times less return on investment than Defiance Daily. But when comparing it to its historical volatility, GraniteShares ETF Trust is 2.87 times less risky than Defiance Daily. It trades about 0.07 of its potential returns per unit of risk. Defiance Daily Target is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,832 in Defiance Daily Target on November 27, 2024 and sell it today you would lose (1,166) from holding Defiance Daily Target or give up 63.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 27.18% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. Defiance Daily Target
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Defiance Daily Target |
GraniteShares ETF and Defiance Daily Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Defiance Daily
The main advantage of trading using opposite GraniteShares ETF and Defiance Daily positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, Defiance Daily 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 Defiance Daily will offset losses from the drop in Defiance Daily'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 |
| Defiance Daily vs. Strategy Shares | Defiance Daily vs. Freedom Day Dividend | Defiance Daily vs. Franklin Templeton ETF | Defiance Daily vs. iShares MSCI China |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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