Correlation Between GraniteShares ETF and FundX Aggressive

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Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and FundX Aggressive 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 FundX Aggressive 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 FundX Aggressive ETF, you can compare the effects of market volatilities on GraniteShares ETF and FundX Aggressive 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 FundX Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and FundX Aggressive.

Diversification Opportunities for GraniteShares ETF and FundX Aggressive

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between GraniteShares and FundX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and FundX Aggressive ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX Aggressive ETF 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 FundX Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX Aggressive ETF has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and FundX Aggressive go up and down completely randomly.

Pair Corralation between GraniteShares ETF and FundX Aggressive

Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 17.65 times more return on investment than FundX Aggressive. However, GraniteShares ETF is 17.65 times more volatile than FundX Aggressive ETF. It trades about 0.3 of its potential returns per unit of risk. FundX Aggressive ETF is currently generating about 0.29 per unit of risk. If you would invest  2,282  in GraniteShares ETF Trust on September 1, 2024 and sell it today you would earn a total of  3,056  from holding GraniteShares ETF Trust or generate 133.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.45%
ValuesDaily Returns

GraniteShares ETF Trust  vs.  FundX Aggressive ETF

 Performance 
       Timeline  
GraniteShares ETF Trust 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares ETF Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, GraniteShares ETF disclosed solid returns over the last few months and may actually be approaching a breakup point.
FundX Aggressive ETF 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in FundX Aggressive ETF are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, FundX Aggressive may actually be approaching a critical reversion point that can send shares even higher in December 2024.

GraniteShares ETF and FundX Aggressive Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GraniteShares ETF and FundX Aggressive

The main advantage of trading using opposite GraniteShares ETF and FundX Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF position performs unexpectedly, FundX Aggressive 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 FundX Aggressive will offset losses from the drop in FundX Aggressive's long position.
The idea behind GraniteShares ETF Trust and FundX Aggressive ETF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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