Correlation Between IShares Russell and GraniteShares HIPS
Can any of the company-specific risk be diversified away by investing in both IShares Russell and GraniteShares HIPS 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 Russell and GraniteShares HIPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell 2000 and GraniteShares HIPS High, you can compare the effects of market volatilities on IShares Russell and GraniteShares HIPS 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 Russell with a short position of GraniteShares HIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and GraniteShares HIPS.
Diversification Opportunities for IShares Russell and GraniteShares HIPS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and GraniteShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 2000 and GraniteShares HIPS High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares HIPS High and IShares Russell 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 Russell 2000 are associated (or correlated) with GraniteShares HIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares HIPS High has no effect on the direction of IShares Russell i.e., IShares Russell and GraniteShares HIPS go up and down completely randomly.
Pair Corralation between IShares Russell and GraniteShares HIPS
Considering the 90-day investment horizon iShares Russell 2000 is expected to generate 1.78 times more return on investment than GraniteShares HIPS. However, IShares Russell is 1.78 times more volatile than GraniteShares HIPS High. It trades about 0.06 of its potential returns per unit of risk. GraniteShares HIPS High is currently generating about 0.08 per unit of risk. If you would invest 17,367 in iShares Russell 2000 on August 30, 2024 and sell it today you would earn a total of 6,728 from holding iShares Russell 2000 or generate 38.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 2000 vs. GraniteShares HIPS High
Performance |
| Timeline |
| iShares Russell 2000 |
| GraniteShares HIPS High |
IShares Russell and GraniteShares HIPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and GraniteShares HIPS
The main advantage of trading using opposite IShares Russell and GraniteShares HIPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell position performs unexpectedly, GraniteShares HIPS 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 HIPS will offset losses from the drop in GraniteShares HIPS's long position.| IShares Russell vs. SPDR Dow Jones | IShares Russell vs. iShares MSCI Emerging | IShares Russell vs. Financial Select Sector | IShares Russell vs. SPDR SP 500 |
| GraniteShares HIPS vs. Amplify BlackSwan Growth | GraniteShares HIPS vs. RPAR Risk Parity | GraniteShares HIPS vs. Pimco Stocksplus Long | GraniteShares HIPS vs. WisdomTree International Efficient |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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