Correlation Between GraniteShares ETF and BlackRock Long

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

Diversification Opportunities for GraniteShares ETF and BlackRock Long

0.62

Correlation Coefficient

GraniteShares ETF  BlackRock Long

Poor diversification

The 3 months correlation between GraniteShares and BlackRock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and BlackRock Long Term Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Long Term 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 BlackRock Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Long Term has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and BlackRock Long go up and down completely randomly.

Pair Corralation between GraniteShares ETF and BlackRock Long

Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 15.14 times more return on investment than BlackRock Long. However, GraniteShares ETF is 15.14 times more volatile than BlackRock Long Term Equity. It trades about 0.16 of its potential returns per unit of risk. BlackRock Long Term Equity is currently generating about 0.14 per unit of risk. If you would invest  2,334  in GraniteShares ETF Trust on September 3, 2024 and sell it today you would earn a total of  3,227  from holding GraniteShares ETF Trust or generate 138.26% return on investment over 90 days.

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

GraniteShares ETF Trust  vs.  BlackRock Long Term Equity

GraniteShares ETF Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares ETF Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, GraniteShares ETF disclosed solid returns over the last few months and may actually be approaching a breakup point.

BlackRock Long Term

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Long Term Equity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, BlackRock Long may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GraniteShares ETF and BlackRock Long

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

The idea behind GraniteShares ETF Trust and BlackRock Long Term Equity 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.