Correlation Between GraniteShares and VanEck Hydrogen

Can any of the company-specific risk be diversified away by investing in both GraniteShares and VanEck Hydrogen 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 VanEck Hydrogen 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 VanEck Hydrogen Economy, you can compare the effects of market volatilities on GraniteShares and VanEck Hydrogen 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 VanEck Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and VanEck Hydrogen.

Diversification Opportunities for GraniteShares and VanEck Hydrogen

-0.42

Correlation Coefficient

GraniteShares  VanEck Hydrogen

Very good diversification

The 3 months correlation between GraniteShares and VanEck is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and VanEck Hydrogen Economy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Hydrogen Economy 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 VanEck Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Hydrogen Economy has no effect on the direction of GraniteShares i.e., GraniteShares and VanEck Hydrogen go up and down completely randomly.

Pair Corralation between GraniteShares and VanEck Hydrogen

Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the VanEck Hydrogen. In addition to that, GraniteShares is 1.84 times more volatile than VanEck Hydrogen Economy. It trades about -0.01 of its total potential returns per unit of risk. VanEck Hydrogen Economy is currently generating about 0.0 per unit of volatility. If you would invest  584.00  in VanEck Hydrogen Economy on September 16, 2024 and sell it today you would lose (11.00) from holding VanEck Hydrogen Economy or give up 1.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

GraniteShares 3x Short  vs.  VanEck Hydrogen Economy

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.

VanEck Hydrogen Economy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GraniteShares and VanEck Hydrogen

The main advantage of trading using opposite GraniteShares and VanEck Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares position performs unexpectedly, VanEck Hydrogen 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 VanEck Hydrogen will offset losses from the drop in VanEck Hydrogen's long position.

The idea behind GraniteShares 3x Short and VanEck Hydrogen Economy 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.