Correlation Between GraniteShares ETF and PHILIP

Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and PHILIP 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 ETF and PHILIP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares ETF Trust and PHILIP MORRIS INTL, you can compare the effects of market volatilities on GraniteShares ETF and PHILIP 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 ETF with a short position of PHILIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and PHILIP.

Diversification Opportunities for GraniteShares ETF and PHILIP

-0.58

Correlation Coefficient

GraniteShares ETF  PHILIP

Excellent diversification

The 3 months correlation between GraniteShares and PHILIP is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and PHILIP MORRIS INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILIP MORRIS INTL and GraniteShares ETF 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 ETF Trust are associated (or correlated) with PHILIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILIP MORRIS INTL has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and PHILIP go up and down completely randomly.

Pair Corralation between GraniteShares ETF and PHILIP

Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 2.78 times more return on investment than PHILIP. However, GraniteShares ETF is 2.78 times more volatile than PHILIP MORRIS INTL. It trades about 0.15 of its potential returns per unit of risk. PHILIP MORRIS INTL is currently generating about -0.09 per unit of risk. If you would invest  2,865  in GraniteShares ETF Trust on September 24, 2024 and sell it today you would earn a total of  635.00  from holding GraniteShares ETF Trust or generate 22.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

GraniteShares ETF Trust  vs.  PHILIP MORRIS INTL

GraniteShares ETF Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares ETF Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, GraniteShares ETF sustained solid returns over the last few months and may actually be approaching a breakup point.

PHILIP MORRIS INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PHILIP MORRIS INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PHILIP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GraniteShares ETF and PHILIP

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

The idea behind GraniteShares ETF Trust and PHILIP MORRIS INTL 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.