Correlation Between GraniteShares ETF and ETF Opportunities

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

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

Diversification Opportunities for GraniteShares ETF and ETF Opportunities

0.64

Correlation Coefficient

GraniteShares ETF  ETF Opportunities

Poor diversification

The 3 months correlation between GraniteShares and ETF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and ETF Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Opportunities Trust and GraniteShares ETF 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 ETF Trust are associated (or correlated) with ETF Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Opportunities Trust has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and ETF Opportunities go up and down completely randomly.

Pair Corralation between GraniteShares ETF and ETF Opportunities

Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 3.0 times more return on investment than ETF Opportunities. However, GraniteShares ETF is 3.0 times more volatile than ETF Opportunities Trust. It trades about 0.13 of its potential returns per unit of risk. ETF Opportunities Trust is currently generating about 0.08 per unit of risk. If you would invest  2,838  in GraniteShares ETF Trust on September 22, 2024 and sell it today you would earn a total of  538.00  from holding GraniteShares ETF Trust or generate 18.96% return on investment over 90 days.

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

GraniteShares ETF Trust  vs.  ETF Opportunities Trust

GraniteShares ETF Trust

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares ETF Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, GraniteShares ETF sustained solid returns over the last few months and may actually be approaching a breakup point.

ETF Opportunities Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ETF Opportunities Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, ETF Opportunities is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GraniteShares ETF and ETF Opportunities

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

The idea behind GraniteShares ETF Trust and ETF Opportunities Trust 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.