Correlation Between Vanguard Total and GraniteShares
Can any of the company-specific risk be diversified away by investing in both Vanguard Total 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 Vanguard Total and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and GraniteShares 2x Long, you can compare the effects of market volatilities on Vanguard Total 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 Vanguard Total with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and GraniteShares.
Diversification Opportunities for Vanguard Total and GraniteShares
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and GraniteShares is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and GraniteShares 2x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 2x Long and Vanguard Total 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 Vanguard Total Stock 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 2x Long has no effect on the direction of Vanguard Total i.e., Vanguard Total and GraniteShares go up and down completely randomly.
Pair Corralation between Vanguard Total and GraniteShares
Considering the 90-day investment horizon Vanguard Total Stock is expected to generate 0.19 times more return on investment than GraniteShares. However, Vanguard Total Stock is 5.31 times less risky than GraniteShares. It trades about 0.13 of its potential returns per unit of risk. GraniteShares 2x Long is currently generating about -0.19 per unit of risk. If you would invest 26,194 in Vanguard Total Stock on September 3, 2024 and sell it today you would earn a total of 3,792 from holding Vanguard Total Stock or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 11.2% |
| Values | Daily Returns |
Vanguard Total Stock vs. GraniteShares 2x Long
Performance |
| Timeline |
| Vanguard Total Stock |
| GraniteShares 2x Long |
Vanguard Total and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and GraniteShares
The main advantage of trading using opposite Vanguard Total and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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.| Vanguard Total vs. Vanguard SP 500 | Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Real Estate | Vanguard Total vs. Vanguard Total Bond |
| GraniteShares vs. Vanguard Total Stock | GraniteShares vs. SPDR SP 500 | GraniteShares vs. iShares Core SP | GraniteShares vs. Vanguard Total Bond |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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