Correlation Between IShares Core and GraniteShares
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and GraniteShares 1x Short, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and GraniteShares.
Diversification Opportunities for IShares Core and GraniteShares
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and GraniteShares is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and GraniteShares 1x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 1x Short and IShares Core 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 iShares Core SP 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 1x Short has no effect on the direction of IShares Core i.e., IShares Core and GraniteShares go up and down completely randomly.
Pair Corralation between IShares Core and GraniteShares
Considering the 90-day investment horizon iShares Core SP is expected to generate 0.12 times more return on investment than GraniteShares. However, iShares Core SP is 8.64 times less risky than GraniteShares. It trades about 0.14 of its potential returns per unit of risk. GraniteShares 1x Short is currently generating about -0.18 per unit of risk. If you would invest 47,182 in iShares Core SP on September 3, 2024 and sell it today you would earn a total of 13,325 from holding iShares Core SP or generate 28.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 27.63% |
| Values | Daily Returns |
iShares Core SP vs. GraniteShares 1x Short
Performance |
| Timeline |
| iShares Core SP |
| GraniteShares 1x Short |
IShares Core and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and GraniteShares
The main advantage of trading using opposite IShares Core and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| GraniteShares vs. Tidal Trust II | GraniteShares vs. Tidal Trust II | GraniteShares vs. Direxion Daily META | GraniteShares vs. Direxion Daily META |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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