Correlation Between GraniteShares and Invesco Health

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

Diversification Opportunities for GraniteShares and Invesco Health

-0.14

Correlation Coefficient

GraniteShares  Invesco Health

Good diversification

The 3 months correlation between GraniteShares and Invesco is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short and Invesco Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Health Care 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 Invesco Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Health Care has no effect on the direction of GraniteShares i.e., GraniteShares and Invesco Health go up and down completely randomly.

Pair Corralation between GraniteShares and Invesco Health

Assuming the 90 days trading horizon GraniteShares 3x Short is expected to under-perform the Invesco Health. In addition to that, GraniteShares is 16.79 times more volatile than Invesco Health Care. It trades about 0.0 of its total potential returns per unit of risk. Invesco Health Care is currently generating about 0.28 per unit of volatility. If you would invest  66,772  in Invesco Health Care on October 22, 2024 and sell it today you would earn a total of  1,736  from holding Invesco Health Care or generate 2.6% return on investment over 90 days.

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

GraniteShares 3x Short  vs.  Invesco Health Care

GraniteShares 3x Short

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 3x Short are ranked lower than 2 (%) 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.

Invesco Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with GraniteShares and Invesco Health

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

The idea behind GraniteShares 3x Short and Invesco Health Care 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.