Correlation Between GraniteShares FAANG and Lyxor 10Y
Can any of the company-specific risk be diversified away by investing in both GraniteShares FAANG and Lyxor 10Y 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 FAANG and Lyxor 10Y into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares FAANG ETC and Lyxor 10Y Inflation, you can compare the effects of market volatilities on GraniteShares FAANG and Lyxor 10Y 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 FAANG with a short position of Lyxor 10Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares FAANG and Lyxor 10Y.
Diversification Opportunities for GraniteShares FAANG and Lyxor 10Y
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GraniteShares and Lyxor is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares FAANG ETC and Lyxor 10Y Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor 10Y Inflation and GraniteShares FAANG 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 FAANG ETC are associated (or correlated) with Lyxor 10Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor 10Y Inflation has no effect on the direction of GraniteShares FAANG i.e., GraniteShares FAANG and Lyxor 10Y go up and down completely randomly.
Pair Corralation between GraniteShares FAANG and Lyxor 10Y
Assuming the 90 days trading horizon GraniteShares FAANG ETC is expected to generate 4.03 times more return on investment than Lyxor 10Y. However, GraniteShares FAANG is 4.03 times more volatile than Lyxor 10Y Inflation. It trades about 0.31 of its potential returns per unit of risk. Lyxor 10Y Inflation is currently generating about 0.06 per unit of risk. If you would invest 4,395 in GraniteShares FAANG ETC on August 27, 2024 and sell it today you would earn a total of 308.00 from holding GraniteShares FAANG ETC or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares FAANG ETC vs. Lyxor 10Y Inflation
Performance |
| Timeline |
| GraniteShares FAANG ETC |
| Lyxor 10Y Inflation |
GraniteShares FAANG and Lyxor 10Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares FAANG and Lyxor 10Y
The main advantage of trading using opposite GraniteShares FAANG and Lyxor 10Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares FAANG position performs unexpectedly, Lyxor 10Y 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 Lyxor 10Y will offset losses from the drop in Lyxor 10Y's long position.| GraniteShares FAANG vs. WisdomTree SP 500 | GraniteShares FAANG vs. WisdomTree Silver 3x | GraniteShares FAANG vs. Lyxor 10Y Inflation | GraniteShares FAANG vs. GraniteShares 3x Long |
| Lyxor 10Y vs. Lyxor Smart Overnight | Lyxor 10Y vs. Lyxor UCITS EuroMTS | Lyxor 10Y vs. Lyxor Core UK | Lyxor 10Y vs. Lyxor Core Global |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |