Correlation Between IShares SP and GraniteShares XOUT
Can any of the company-specific risk be diversified away by investing in both IShares SP and GraniteShares XOUT 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 SP and GraniteShares XOUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and GraniteShares XOUT Large, you can compare the effects of market volatilities on IShares SP and GraniteShares XOUT 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 SP with a short position of GraniteShares XOUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and GraniteShares XOUT.
Diversification Opportunities for IShares SP and GraniteShares XOUT
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and GraniteShares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and GraniteShares XOUT Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares XOUT Large and IShares SP 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 SP 500 are associated (or correlated) with GraniteShares XOUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares XOUT Large has no effect on the direction of IShares SP i.e., IShares SP and GraniteShares XOUT go up and down completely randomly.
Pair Corralation between IShares SP and GraniteShares XOUT
Considering the 90-day investment horizon IShares SP is expected to generate 1.87 times less return on investment than GraniteShares XOUT. But when comparing it to its historical volatility, iShares SP 500 is 1.24 times less risky than GraniteShares XOUT. It trades about 0.13 of its potential returns per unit of risk. GraniteShares XOUT Large is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,404 in GraniteShares XOUT Large on August 29, 2024 and sell it today you would earn a total of 317.00 from holding GraniteShares XOUT Large or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 500 vs. GraniteShares XOUT Large
Performance |
| Timeline |
| iShares SP 500 |
| GraniteShares XOUT Large |
IShares SP and GraniteShares XOUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and GraniteShares XOUT
The main advantage of trading using opposite IShares SP and GraniteShares XOUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, GraniteShares XOUT 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 XOUT will offset losses from the drop in GraniteShares XOUT's long position.| IShares SP vs. Invesco Dynamic Large | IShares SP vs. Perella Weinberg Partners | IShares SP vs. HUMANA INC | IShares SP vs. Aquagold International |
| GraniteShares XOUT vs. Invesco Dynamic Large | GraniteShares XOUT vs. Perella Weinberg Partners | GraniteShares XOUT vs. HUMANA INC | GraniteShares XOUT vs. Aquagold International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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