Correlation Between GraniteShares 15x and First Trust
Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x and First Trust 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 15x and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 15x Long and First Trust Nasdaq, you can compare the effects of market volatilities on GraniteShares 15x and First Trust 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 15x with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and First Trust.
Diversification Opportunities for GraniteShares 15x and First Trust
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GraniteShares and First is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long and First Trust Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Nasdaq and GraniteShares 15x 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 15x Long are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Nasdaq has no effect on the direction of GraniteShares 15x i.e., GraniteShares 15x and First Trust go up and down completely randomly.
Pair Corralation between GraniteShares 15x and First Trust
Given the investment horizon of 90 days GraniteShares 15x Long is expected to under-perform the First Trust. In addition to that, GraniteShares 15x is 2.85 times more volatile than First Trust Nasdaq. It trades about -0.06 of its total potential returns per unit of risk. First Trust Nasdaq is currently generating about 0.29 per unit of volatility. If you would invest 3,343 in First Trust Nasdaq on August 28, 2024 and sell it today you would earn a total of 368.00 from holding First Trust Nasdaq or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 15x Long vs. First Trust Nasdaq
Performance |
| Timeline |
| GraniteShares 15x Long |
| First Trust Nasdaq |
GraniteShares 15x and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares 15x and First Trust
The main advantage of trading using opposite GraniteShares 15x and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 15x position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| GraniteShares 15x vs. Direxion Daily MSFT | GraniteShares 15x vs. Direxion Daily GOOGL | GraniteShares 15x vs. AXS 125X NVDA | GraniteShares 15x vs. Direxion Shares ETF |
| First Trust vs. Gabelli ETFs Trust | First Trust vs. First Trust Exchange Traded | First Trust vs. Northern Lights | First Trust vs. First Trust Exchange Traded |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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