Correlation Between GraniteShares and SSgA SPDR

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

By analyzing existing cross correlation between GraniteShares 3x Long and SSgA SPDR ETFs, you can compare the effects of market volatilities on GraniteShares and SSgA SPDR 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 SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and SSgA SPDR.

Diversification Opportunities for GraniteShares and SSgA SPDR

0.21

Correlation Coefficient

GraniteShares  SSgA SPDR

Modest diversification

The 3 months correlation between GraniteShares and SSgA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Long and SSgA SPDR ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR ETFs 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 Long are associated (or correlated) with SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR ETFs has no effect on the direction of GraniteShares i.e., GraniteShares and SSgA SPDR go up and down completely randomly.

Pair Corralation between GraniteShares and SSgA SPDR

Assuming the 90 days trading horizon GraniteShares 3x Long is expected to generate 9.61 times more return on investment than SSgA SPDR. However, GraniteShares is 9.61 times more volatile than SSgA SPDR ETFs. It trades about 0.04 of its potential returns per unit of risk. SSgA SPDR ETFs is currently generating about 0.08 per unit of risk. If you would invest  8,556  in GraniteShares 3x Long on December 2, 2024 and sell it today you would earn a total of  427.00  from holding GraniteShares 3x Long or generate 4.99% return on investment over 90 days.

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

GraniteShares 3x Long  vs.  SSgA SPDR ETFs

GraniteShares 3x Long

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 3x Long are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, GraniteShares may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SSgA SPDR ETFs

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SSgA SPDR ETFs are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SSgA SPDR 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 SSgA SPDR

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

The idea behind GraniteShares 3x Long and SSgA SPDR ETFs 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 Stocks Directory module to find actively traded stocks across global markets.