Correlation Between GraniteShares and WisdomTree Short

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

Diversification Opportunities for GraniteShares and WisdomTree Short

0.4

Correlation Coefficient

GraniteShares  WisdomTree Short

Very weak diversification

The 3 months correlation between GraniteShares and WisdomTree is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and WisdomTree Short GBP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Short GBP 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 WisdomTree Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Short GBP has no effect on the direction of GraniteShares i.e., GraniteShares and WisdomTree Short go up and down completely randomly.

Pair Corralation between GraniteShares and WisdomTree Short

Assuming the 90 days trading horizon GraniteShares is expected to generate 1.26 times less return on investment than WisdomTree Short. In addition to that, GraniteShares is 9.54 times more volatile than WisdomTree Short GBP. It trades about 0.01 of its total potential returns per unit of risk. WisdomTree Short GBP is currently generating about 0.15 per unit of volatility. If you would invest  5,889  in WisdomTree Short GBP on August 31, 2024 and sell it today you would earn a total of  255.00  from holding WisdomTree Short GBP or generate 4.33% return on investment over 90 days.

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

GraniteShares 3x Short  vs.  WisdomTree Short GBP

GraniteShares 3x Short

Risk-Adjusted Performance

0 of 100

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.

WisdomTree Short GBP

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Short GBP are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, WisdomTree Short 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 WisdomTree Short

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

The idea behind GraniteShares 3x Short and WisdomTree Short GBP 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.