Correlation Between GraniteShares and JPMorgan ETFs

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

Diversification Opportunities for GraniteShares and JPMorgan ETFs

0.41

Correlation Coefficient

GraniteShares  JPMorgan ETFs

Very weak diversification

The 3 months correlation between GraniteShares and JPMorgan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and JPMorgan ETFs ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan ETFs ICAV 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 JPMorgan ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan ETFs ICAV has no effect on the direction of GraniteShares i.e., GraniteShares and JPMorgan ETFs go up and down completely randomly.

Pair Corralation between GraniteShares and JPMorgan ETFs

Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the JPMorgan ETFs. In addition to that, GraniteShares is 7.26 times more volatile than JPMorgan ETFs ICAV. It trades about -0.08 of its total potential returns per unit of risk. JPMorgan ETFs ICAV is currently generating about -0.06 per unit of volatility. If you would invest  2,991  in JPMorgan ETFs ICAV on October 7, 2024 and sell it today you would lose (110.00) from holding JPMorgan ETFs ICAV or give up 3.68% of portfolio value over 90 days.

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

GraniteShares 3x Short  vs.  JPMorgan ETFs ICAV

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

JPMorgan ETFs ICAV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan ETFs ICAV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, JPMorgan ETFs 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 JPMorgan ETFs

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

The idea behind GraniteShares 3x Short and JPMorgan ETFs ICAV 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.