Correlation Between Direxion Auspice and GraniteShares Bloomberg

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

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

Diversification Opportunities for Direxion Auspice and GraniteShares Bloomberg

0.85

Correlation Coefficient

Direxion Auspice  GraniteShares Bloomberg

Very poor diversification

The 3 months correlation between Direxion and GraniteShares is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Auspice Broad and GraniteShares Bloomberg Commod in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Bloomberg and Direxion Auspice 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 Direxion Auspice Broad 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 Direxion Auspice i.e., Direxion Auspice and GraniteShares Bloomberg go up and down completely randomly.

Pair Corralation between Direxion Auspice and GraniteShares Bloomberg

Considering the 90-day investment horizon Direxion Auspice is expected to generate 45.38 times less return on investment than GraniteShares Bloomberg. But when comparing it to its historical volatility, Direxion Auspice Broad is 1.32 times less risky than GraniteShares Bloomberg. It trades about 0.0 of its potential returns per unit of risk. GraniteShares Bloomberg Commodity is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,958  in GraniteShares Bloomberg Commodity on December 4, 2024 and sell it today you would earn a total of  138.00  from holding GraniteShares Bloomberg Commodity or generate 7.05% return on investment over 90 days.

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

Direxion Auspice Broad  vs.  GraniteShares Bloomberg Commod

Direxion Auspice Broad

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Auspice Broad has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Direxion Auspice is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

GraniteShares Bloomberg

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares Bloomberg Commodity are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent primary indicators, GraniteShares Bloomberg may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Direxion Auspice and GraniteShares Bloomberg

The main advantage of trading using opposite Direxion Auspice and GraniteShares Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Auspice 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 Direxion Auspice Broad 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.