Correlation Between GraniteShares HIPS and Global X
Can any of the company-specific risk be diversified away by investing in both GraniteShares HIPS and Global X 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 HIPS and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares HIPS High and Global X Alternative, you can compare the effects of market volatilities on GraniteShares HIPS and Global X 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 HIPS with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares HIPS and Global X.
Diversification Opportunities for GraniteShares HIPS and Global X
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GraniteShares and Global is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares HIPS High and Global X Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Alternative and GraniteShares HIPS 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 HIPS High are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Alternative has no effect on the direction of GraniteShares HIPS i.e., GraniteShares HIPS and Global X go up and down completely randomly.
Pair Corralation between GraniteShares HIPS and Global X
Given the investment horizon of 90 days GraniteShares HIPS High is expected to generate 0.96 times more return on investment than Global X. However, GraniteShares HIPS High is 1.04 times less risky than Global X. It trades about 0.31 of its potential returns per unit of risk. Global X Alternative is currently generating about 0.19 per unit of risk. If you would invest 1,277 in GraniteShares HIPS High on August 27, 2024 and sell it today you would earn a total of 39.00 from holding GraniteShares HIPS High or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares HIPS High vs. Global X Alternative
Performance |
| Timeline |
| GraniteShares HIPS High |
| Global X Alternative |
GraniteShares HIPS and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares HIPS and Global X
The main advantage of trading using opposite GraniteShares HIPS and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares HIPS position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| GraniteShares HIPS vs. Amplify High Income | GraniteShares HIPS vs. Global X Alternative | GraniteShares HIPS vs. Saba Closed End Funds | GraniteShares HIPS vs. Arrow ETF Trust |
| Global X vs. Amplify BlackSwan Growth | Global X vs. RPAR Risk Parity | Global X vs. WisdomTree International Efficient | Global X vs. iMGP DBi Managed |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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