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 3x Short and GraniteShares 3x Long, 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

-0.47

Correlation Coefficient

GraniteShares  GraniteShares

Very good diversification

The 3 months correlation between GraniteShares and GraniteShares is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and GraniteShares 3x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 3x Long 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 3x 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 Long 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 3x Short is expected to generate 2.35 times more return on investment than GraniteShares. However, GraniteShares is 2.35 times more volatile than GraniteShares 3x Long. It trades about 0.03 of its potential returns per unit of risk. GraniteShares 3x Long is currently generating about 0.07 per unit of risk. If you would invest  13,730  in GraniteShares 3x Short on September 24, 2024 and sell it today you would lose (12,158) from holding GraniteShares 3x Short or give up 88.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

GraniteShares 3x Short  vs.  GraniteShares 3x Long

GraniteShares 3x Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GraniteShares 3x Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GraniteShares is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GraniteShares 3x Long

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 3x Long are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GraniteShares unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind GraniteShares 3x Short and GraniteShares 3x Long pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.