Correlation Between IShares Commodity and GraniteShares Bloomberg

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

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

Diversification Opportunities for IShares Commodity and GraniteShares Bloomberg

0.91

Correlation Coefficient

IShares Commodity  GraniteShares Bloomberg

Almost no diversification

The 3 months correlation between IShares and GraniteShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Commodity Curve and GraniteShares Bloomberg Commod in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Bloomberg and IShares Commodity 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 iShares Commodity Curve are associated (or correlated) with GraniteShares Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Bloomberg has no effect on the direction of IShares Commodity i.e., IShares Commodity and GraniteShares Bloomberg go up and down completely randomly.

Pair Corralation between IShares Commodity and GraniteShares Bloomberg

Given the investment horizon of 90 days iShares Commodity Curve is expected to generate 1.25 times more return on investment than GraniteShares Bloomberg. However, IShares Commodity is 1.25 times more volatile than GraniteShares Bloomberg Commodity. It trades about 0.07 of its potential returns per unit of risk. GraniteShares Bloomberg Commodity is currently generating about 0.08 per unit of risk. If you would invest  2,009  in iShares Commodity Curve on September 13, 2024 and sell it today you would earn a total of  84.00  from holding iShares Commodity Curve or generate 4.18% return on investment over 90 days.

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

iShares Commodity Curve  vs.  GraniteShares Bloomberg Commod

iShares Commodity Curve

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Commodity Curve are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares Commodity is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

GraniteShares Bloomberg

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares Bloomberg Commodity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, GraniteShares Bloomberg is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Commodity and GraniteShares Bloomberg

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

The idea behind iShares Commodity Curve and GraniteShares Bloomberg Commodity 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 Anywhere module to track or share privately all of your investments from the convenience of any device.