Correlation Between AB Active and GraniteShares HIPS
Can any of the company-specific risk be diversified away by investing in both AB Active 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 AB Active and GraniteShares HIPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB Active ETFs, and GraniteShares HIPS High, you can compare the effects of market volatilities on AB Active 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 AB Active with a short position of GraniteShares HIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Active and GraniteShares HIPS.
Diversification Opportunities for AB Active and GraniteShares HIPS
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LRGC and GraniteShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding AB Active ETFs, 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 AB Active 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 AB Active ETFs, 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 AB Active i.e., AB Active and GraniteShares HIPS go up and down completely randomly.
Pair Corralation between AB Active and GraniteShares HIPS
Given the investment horizon of 90 days AB Active is expected to generate 1.98 times less return on investment than GraniteShares HIPS. In addition to that, AB Active is 1.71 times more volatile than GraniteShares HIPS High. It trades about 0.14 of its total potential returns per unit of risk. GraniteShares HIPS High is currently generating about 0.48 per unit of volatility. If you would invest 1,258 in GraniteShares HIPS High on August 30, 2024 and sell it today you would earn a total of 71.00 from holding GraniteShares HIPS High or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AB Active ETFs, vs. GraniteShares HIPS High
Performance |
| Timeline |
| AB Active ETFs, |
| GraniteShares HIPS High |
AB Active and GraniteShares HIPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB Active and GraniteShares HIPS
The main advantage of trading using opposite AB Active and GraniteShares HIPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB Active 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.| AB Active vs. FT Vest Equity | AB Active vs. Northern Lights | AB Active vs. Dimensional International High | AB Active vs. First Trust Exchange Traded |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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