Correlation Between GraniteShares Bloomberg and Direxion Auspice

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

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

Diversification Opportunities for GraniteShares Bloomberg and Direxion Auspice

0.8

Correlation Coefficient

GraniteShares Bloomberg  Direxion Auspice

Very poor diversification

The 3 months correlation between GraniteShares and Direxion is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares Bloomberg Commod and Direxion Auspice Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Auspice Broad and GraniteShares Bloomberg 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 Bloomberg Commodity are associated (or correlated) with Direxion Auspice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Auspice Broad has no effect on the direction of GraniteShares Bloomberg i.e., GraniteShares Bloomberg and Direxion Auspice go up and down completely randomly.

Pair Corralation between GraniteShares Bloomberg and Direxion Auspice

Given the investment horizon of 90 days GraniteShares Bloomberg Commodity is expected to generate 1.41 times more return on investment than Direxion Auspice. However, GraniteShares Bloomberg is 1.41 times more volatile than Direxion Auspice Broad. It trades about 0.21 of its potential returns per unit of risk. Direxion Auspice Broad is currently generating about 0.05 per unit of risk. If you would invest  1,966  in GraniteShares Bloomberg Commodity on November 19, 2024 and sell it today you would earn a total of  179.40  from holding GraniteShares Bloomberg Commodity or generate 9.13% return on investment over 90 days.

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

GraniteShares Bloomberg Commod  vs.  Direxion Auspice Broad

GraniteShares Bloomberg

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares Bloomberg Commodity are ranked lower than 16 (%) 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 March 2025.

Direxion Auspice Broad

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Direxion Auspice Broad are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with GraniteShares Bloomberg and Direxion Auspice

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

The idea behind GraniteShares Bloomberg Commodity and Direxion Auspice Broad 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.