Correlation Between GraniteShares FAANG and Amundi Treasury
Can any of the company-specific risk be diversified away by investing in both GraniteShares FAANG and Amundi Treasury 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 Amundi Treasury 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 Amundi Treasury Bond, you can compare the effects of market volatilities on GraniteShares FAANG and Amundi Treasury 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 Amundi Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares FAANG and Amundi Treasury.
Diversification Opportunities for GraniteShares FAANG and Amundi Treasury
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GraniteShares and Amundi is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares FAANG ETC and Amundi Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Treasury Bond 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 Amundi Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Treasury Bond has no effect on the direction of GraniteShares FAANG i.e., GraniteShares FAANG and Amundi Treasury go up and down completely randomly.
Pair Corralation between GraniteShares FAANG and Amundi Treasury
Assuming the 90 days trading horizon GraniteShares FAANG ETC is expected to generate 1.31 times more return on investment than Amundi Treasury. However, GraniteShares FAANG is 1.31 times more volatile than Amundi Treasury Bond. It trades about 0.33 of its potential returns per unit of risk. Amundi Treasury Bond is currently generating about -0.04 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 327.00 from holding GraniteShares FAANG ETC or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares FAANG ETC vs. Amundi Treasury Bond
Performance |
| Timeline |
| GraniteShares FAANG ETC |
| Amundi Treasury Bond |
GraniteShares FAANG and Amundi Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares FAANG and Amundi Treasury
The main advantage of trading using opposite GraniteShares FAANG and Amundi Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares FAANG position performs unexpectedly, Amundi Treasury 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 Amundi Treasury will offset losses from the drop in Amundi Treasury'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 |
| Amundi Treasury vs. Leverage Shares 3x | Amundi Treasury vs. WisdomTree SP 500 | Amundi Treasury vs. WisdomTree Silver 3x | Amundi Treasury vs. Leverage Shares 3x |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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