Correlation Between GraniteShares ETF and Vanguard FTSE
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Vanguard FTSE 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 FTSE 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 FTSE Pacific, you can compare the effects of market volatilities on GraniteShares ETF and Vanguard FTSE 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 FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Vanguard FTSE.
Diversification Opportunities for GraniteShares ETF and Vanguard FTSE
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GraniteShares and Vanguard is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Vanguard FTSE Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Pacific 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 FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Pacific has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Vanguard FTSE go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Vanguard FTSE
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 24.97 times more return on investment than Vanguard FTSE. However, GraniteShares ETF is 24.97 times more volatile than Vanguard FTSE Pacific. It trades about 0.2 of its potential returns per unit of risk. Vanguard FTSE Pacific is currently generating about -0.04 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. Vanguard FTSE Pacific
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Vanguard FTSE Pacific |
GraniteShares ETF and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Vanguard FTSE
The main advantage of trading using opposite GraniteShares ETF and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, Vanguard FTSE 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 FTSE will offset losses from the drop in Vanguard FTSE'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 FTSE vs. Vanguard FTSE Europe | Vanguard FTSE vs. Vanguard Large Cap Index | Vanguard FTSE vs. Vanguard Materials Index | Vanguard FTSE vs. Vanguard FTSE All World |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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