Correlation Between ARK Next and GraniteShares Gold
Can any of the company-specific risk be diversified away by investing in both ARK Next and GraniteShares Gold 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 ARK Next and GraniteShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARK Next Generation and GraniteShares Gold Trust, you can compare the effects of market volatilities on ARK Next and GraniteShares Gold 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 ARK Next with a short position of GraniteShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Next and GraniteShares Gold.
Diversification Opportunities for ARK Next and GraniteShares Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARK and GraniteShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ARK Next Generation and GraniteShares Gold Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Gold Trust and ARK Next 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 ARK Next Generation are associated (or correlated) with GraniteShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Gold Trust has no effect on the direction of ARK Next i.e., ARK Next and GraniteShares Gold go up and down completely randomly.
Pair Corralation between ARK Next and GraniteShares Gold
Given the investment horizon of 90 days ARK Next Generation is expected to generate 2.47 times more return on investment than GraniteShares Gold. However, ARK Next is 2.47 times more volatile than GraniteShares Gold Trust. It trades about 0.09 of its potential returns per unit of risk. GraniteShares Gold Trust is currently generating about 0.08 per unit of risk. If you would invest 4,515 in ARK Next Generation on October 11, 2024 and sell it today you would earn a total of 6,584 from holding ARK Next Generation or generate 145.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
ARK Next Generation vs. GraniteShares Gold Trust
Performance |
Timeline |
ARK Next Generation |
GraniteShares Gold Trust |
ARK Next and GraniteShares Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ARK Next and GraniteShares Gold
The main advantage of trading using opposite ARK Next and GraniteShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Next position performs unexpectedly, GraniteShares Gold 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 Gold will offset losses from the drop in GraniteShares Gold's long position.ARK Next vs. ARK Autonomous Technology | ARK Next vs. ARK Genomic Revolution | ARK Next vs. ARK Fintech Innovation | ARK Next vs. ARK Innovation ETF |
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Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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