Correlation Between GraniteShares and GraniteShares
Can any of the company-specific risk be diversified away by investing in both GraniteShares 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 GraniteShares and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 1x Short and GraniteShares 3x Short, you can compare the effects of market volatilities on GraniteShares 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 GraniteShares with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and GraniteShares.
Diversification Opportunities for GraniteShares and GraniteShares
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GraniteShares and GraniteShares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 1x Short and GraniteShares 3x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 3x Short and GraniteShares 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 1x Short 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 3x Short has no effect on the direction of GraniteShares i.e., GraniteShares and GraniteShares go up and down completely randomly.
Pair Corralation between GraniteShares and GraniteShares
Assuming the 90 days trading horizon GraniteShares 1x Short is expected to under-perform the GraniteShares. But the etf apears to be less risky and, when comparing its historical volatility, GraniteShares 1x Short is 4.46 times less risky than GraniteShares. The etf trades about -0.15 of its potential returns per unit of risk. The GraniteShares 3x Short is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 64,850 in GraniteShares 3x Short on August 29, 2024 and sell it today you would earn a total of 2,188 from holding GraniteShares 3x Short or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares 1x Short vs. GraniteShares 3x Short
Performance |
| Timeline |
| GraniteShares 1x Short |
| GraniteShares 3x Short |
GraniteShares and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and GraniteShares
The main advantage of trading using opposite GraniteShares and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 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.| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long |
| GraniteShares vs. GraniteShares 3x Short | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 1x Short |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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