Correlation Between GM and GraniteShares
Can any of the company-specific risk be diversified away by investing in both GM and GraniteShares 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 GM and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and GraniteShares 3x Short, you can compare the effects of market volatilities on GM and GraniteShares 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 GM with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and GraniteShares.
Diversification Opportunities for GM and GraniteShares
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GM and GraniteShares is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and GraniteShares 3x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 3x Short and GM 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 General Motors are associated (or correlated) with GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 3x Short has no effect on the direction of GM i.e., GM and GraniteShares go up and down completely randomly.
Pair Corralation between GM and GraniteShares
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.6 times more return on investment than GraniteShares. However, General Motors is 1.67 times less risky than GraniteShares. It trades about 0.16 of its potential returns per unit of risk. GraniteShares 3x Short is currently generating about -0.36 per unit of risk. If you would invest 5,096 in General Motors on September 2, 2024 and sell it today you would earn a total of 463.00 from holding General Motors or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. GraniteShares 3x Short
Performance |
| Timeline |
| General Motors |
| GraniteShares 3x Short |
GM and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and GraniteShares
The main advantage of trading using opposite GM and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, GraniteShares 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 will offset losses from the drop in GraniteShares' long position.The idea behind General Motors and GraniteShares 3x Short 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.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 1x Short |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |