Correlation Between GraniteShares and Multi Units

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

Diversification Opportunities for GraniteShares and Multi Units

-0.36

Correlation Coefficient

GraniteShares  Multi Units

Very good diversification

The 3 months correlation between GraniteShares and Multi is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France 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 Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of GraniteShares i.e., GraniteShares and Multi Units go up and down completely randomly.

Pair Corralation between GraniteShares and Multi Units

Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the Multi Units. In addition to that, GraniteShares is 5.0 times more volatile than Multi Units France. It trades about -0.03 of its total potential returns per unit of risk. Multi Units France is currently generating about -0.04 per unit of volatility. If you would invest  272,000  in Multi Units France on September 14, 2024 and sell it today you would lose (6,612) from holding Multi Units France or give up 2.43% of portfolio value over 90 days.

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

GraniteShares 3x Short  vs.  Multi Units France

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 latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Multi Units France

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GraniteShares and Multi Units

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

The idea behind GraniteShares 3x Short and Multi Units France 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.