Correlation Between GraniteShares FATANG and GraniteShares FAANG
Can any of the company-specific risk be diversified away by investing in both GraniteShares FATANG and GraniteShares FAANG 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 FATANG and GraniteShares FAANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares FATANG ETC and GraniteShares FAANG ETC, you can compare the effects of market volatilities on GraniteShares FATANG and GraniteShares FAANG 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 FATANG with a short position of GraniteShares FAANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares FATANG and GraniteShares FAANG.
Diversification Opportunities for GraniteShares FATANG and GraniteShares FAANG
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GraniteShares and GraniteShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares FATANG ETC and GraniteShares FAANG ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares FAANG ETC and GraniteShares FATANG 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 FATANG ETC are associated (or correlated) with GraniteShares FAANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares FAANG ETC has no effect on the direction of GraniteShares FATANG i.e., GraniteShares FATANG and GraniteShares FAANG go up and down completely randomly.
Pair Corralation between GraniteShares FATANG and GraniteShares FAANG
Assuming the 90 days trading horizon GraniteShares FATANG ETC is expected to generate 1.54 times more return on investment than GraniteShares FAANG. However, GraniteShares FATANG is 1.54 times more volatile than GraniteShares FAANG ETC. It trades about 0.34 of its potential returns per unit of risk. GraniteShares FAANG ETC is currently generating about 0.31 per unit of risk. If you would invest 4,272 in GraniteShares FATANG ETC on August 27, 2024 and sell it today you would earn a total of 513.00 from holding GraniteShares FATANG ETC or generate 12.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares FATANG ETC vs. GraniteShares FAANG ETC
Performance |
| Timeline |
| GraniteShares FATANG ETC |
| GraniteShares FAANG ETC |
GraniteShares FATANG and GraniteShares FAANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares FATANG and GraniteShares FAANG
The main advantage of trading using opposite GraniteShares FATANG and GraniteShares FAANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares FATANG position performs unexpectedly, GraniteShares FAANG 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 GraniteShares FAANG will offset losses from the drop in GraniteShares FAANG's long position.| GraniteShares FATANG vs. GraniteShares 3x Short | GraniteShares FATANG vs. GraniteShares 3x Long | GraniteShares FATANG vs. GraniteShares 3x Long | GraniteShares FATANG vs. GraniteShares 1x Short |
| GraniteShares FAANG vs. WisdomTree SP 500 | GraniteShares FAANG vs. WisdomTree Silver 3x | GraniteShares FAANG vs. Lyxor 10Y Inflation | GraniteShares FAANG vs. GraniteShares 3x Long |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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