Correlation Between WisdomTree Silver and GraniteShares

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

By analyzing existing cross correlation between WisdomTree Silver 3x and GraniteShares 3x Short, you can compare the effects of market volatilities on WisdomTree Silver and GraniteShares 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 WisdomTree Silver with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and GraniteShares.

Diversification Opportunities for WisdomTree Silver and GraniteShares

0.01

Correlation Coefficient

WisdomTree Silver  GraniteShares

Significant diversification

The 3 months correlation between WisdomTree and GraniteShares is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 3x and GraniteShares 3x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 3x Short and WisdomTree Silver 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 WisdomTree Silver 3x are associated (or correlated) with GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 3x Short has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and GraniteShares go up and down completely randomly.

Pair Corralation between WisdomTree Silver and GraniteShares

Assuming the 90 days trading horizon WisdomTree Silver 3x is expected to under-perform the GraniteShares. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree Silver 3x is 1.15 times less risky than GraniteShares. The etf trades about -0.15 of its potential returns per unit of risk. The GraniteShares 3x Short is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  57,075  in GraniteShares 3x Short on September 22, 2024 and sell it today you would earn a total of  11,988  from holding GraniteShares 3x Short or generate 21.0% return on investment over 90 days.

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

WisdomTree Silver 3x  vs.  GraniteShares 3x Short

WisdomTree Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WisdomTree Silver 3x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

GraniteShares 3x Short

Risk-Adjusted Performance

0 of 100

Very 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 uncertain performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with WisdomTree Silver and GraniteShares

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

The idea behind WisdomTree Silver 3x and GraniteShares 3x Short 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.