Correlation Between GraniteShares and Vaneck Vectors

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

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

Diversification Opportunities for GraniteShares and Vaneck Vectors

-0.23

Correlation Coefficient

GraniteShares  Vaneck Vectors

Very good diversification

The 3 months correlation between GraniteShares and Vaneck is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and Vaneck Vectors UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Vectors UCITS 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 Short are associated (or correlated) with Vaneck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Vectors UCITS has no effect on the direction of GraniteShares i.e., GraniteShares and Vaneck Vectors go up and down completely randomly.

Pair Corralation between GraniteShares and Vaneck Vectors

Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 37.06 times more return on investment than Vaneck Vectors. However, GraniteShares is 37.06 times more volatile than Vaneck Vectors UCITS. It trades about 0.02 of its potential returns per unit of risk. Vaneck Vectors UCITS is currently generating about 0.05 per unit of risk. If you would invest  63,875  in GraniteShares 3x Short on December 26, 2024 and sell it today you would lose (12,325) from holding GraniteShares 3x Short or give up 19.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

GraniteShares 3x Short  vs.  Vaneck Vectors UCITS

GraniteShares 3x Short

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 3x Short are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, GraniteShares unveiled solid returns over the last few months and may actually be approaching a breakup point.

Vaneck Vectors UCITS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vaneck Vectors UCITS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Vaneck Vectors 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 Vaneck Vectors

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

The idea behind GraniteShares 3x Short and Vaneck Vectors UCITS 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.