Correlation Between GraniteShares XOUT and IShares Core
Can any of the company-specific risk be diversified away by investing in both GraniteShares XOUT and IShares Core 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 XOUT and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares XOUT Large and iShares Core SP, you can compare the effects of market volatilities on GraniteShares XOUT and IShares Core 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 XOUT with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares XOUT and IShares Core.
Diversification Opportunities for GraniteShares XOUT and IShares Core
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GraniteShares and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares XOUT Large and iShares Core SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core SP and GraniteShares XOUT 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 XOUT Large are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core SP has no effect on the direction of GraniteShares XOUT i.e., GraniteShares XOUT and IShares Core go up and down completely randomly.
Pair Corralation between GraniteShares XOUT and IShares Core
Given the investment horizon of 90 days GraniteShares XOUT Large is expected to generate 1.37 times more return on investment than IShares Core. However, GraniteShares XOUT is 1.37 times more volatile than iShares Core SP. It trades about 0.1 of its potential returns per unit of risk. iShares Core SP is currently generating about 0.11 per unit of risk. If you would invest 3,417 in GraniteShares XOUT Large on October 20, 2024 and sell it today you would earn a total of 2,341 from holding GraniteShares XOUT Large or generate 68.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GraniteShares XOUT Large vs. iShares Core SP
Performance |
| Timeline |
| GraniteShares XOUT Large |
| iShares Core SP |
GraniteShares XOUT and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares XOUT and IShares Core
The main advantage of trading using opposite GraniteShares XOUT and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares XOUT position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.| GraniteShares XOUT vs. Vanguard Information Technology | GraniteShares XOUT vs. Technology Select Sector | GraniteShares XOUT vs. iShares Technology ETF | GraniteShares XOUT vs. VanEck Semiconductor ETF |
| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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