Correlation Between GraniteShares 15x and Invesco Total

Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x and Invesco Total 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 15x and Invesco Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares 15x Long and Invesco Total Return, you can compare the effects of market volatilities on GraniteShares 15x and Invesco Total 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 15x with a short position of Invesco Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and Invesco Total.

Diversification Opportunities for GraniteShares 15x and Invesco Total

-0.87

Correlation Coefficient

GraniteShares 15x  Invesco Total

Pay attention - limited upside

The 3 months correlation between GraniteShares and Invesco is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long and Invesco Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Total Return and GraniteShares 15x 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 15x Long are associated (or correlated) with Invesco Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Total Return has no effect on the direction of GraniteShares 15x i.e., GraniteShares 15x and Invesco Total go up and down completely randomly.

Pair Corralation between GraniteShares 15x and Invesco Total

Given the investment horizon of 90 days GraniteShares 15x Long is expected to generate 18.06 times more return on investment than Invesco Total. However, GraniteShares 15x is 18.06 times more volatile than Invesco Total Return. It trades about 0.15 of its potential returns per unit of risk. Invesco Total Return is currently generating about -0.02 per unit of risk. If you would invest  4,731  in GraniteShares 15x Long on September 2, 2024 and sell it today you would earn a total of  2,458  from holding GraniteShares 15x Long or generate 51.96% return on investment over 90 days.

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

GraniteShares 15x Long  vs.  Invesco Total Return

GraniteShares 15x Long

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 15x Long are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, GraniteShares 15x disclosed solid returns over the last few months and may actually be approaching a breakup point.

Invesco Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Total Return has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Invesco Total is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GraniteShares 15x and Invesco Total

The main advantage of trading using opposite GraniteShares 15x and Invesco Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 15x position performs unexpectedly, Invesco Total 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 Invesco Total will offset losses from the drop in Invesco Total's long position.

The idea behind GraniteShares 15x Long and Invesco Total Return 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.