Correlation Between GraniteShares ETF and Vanguard Consumer
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Vanguard Consumer 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 Vanguard Consumer 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 Vanguard Consumer Discretionary, you can compare the effects of market volatilities on GraniteShares ETF and Vanguard Consumer 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 Vanguard Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Vanguard Consumer.
Diversification Opportunities for GraniteShares ETF and Vanguard Consumer
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GraniteShares and Vanguard is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Vanguard Consumer Discretionar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Consumer 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 Vanguard Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Consumer has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Vanguard Consumer go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Vanguard Consumer
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 15.63 times more return on investment than Vanguard Consumer. However, GraniteShares ETF is 15.63 times more volatile than Vanguard Consumer Discretionary. It trades about 0.2 of its potential returns per unit of risk. Vanguard Consumer Discretionary is currently generating about 0.35 per unit of risk. If you would invest 3,550 in GraniteShares ETF Trust on August 30, 2024 and sell it today you would earn a total of 2,364 from holding GraniteShares ETF Trust or generate 66.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. Vanguard Consumer Discretionar
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Vanguard Consumer |
GraniteShares ETF and Vanguard Consumer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Vanguard Consumer
The main advantage of trading using opposite GraniteShares ETF and Vanguard Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, Vanguard Consumer 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 Vanguard Consumer will offset losses from the drop in Vanguard Consumer'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 |
| Vanguard Consumer vs. Vanguard Consumer Staples | Vanguard Consumer vs. Vanguard Industrials Index | Vanguard Consumer vs. Vanguard Communication Services | Vanguard Consumer vs. Vanguard Materials Index |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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