Correlation Between GraniteShares ETF and Wahed FTSE

Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF and Wahed FTSE 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 Wahed FTSE 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 Wahed FTSE USA, you can compare the effects of market volatilities on GraniteShares ETF and Wahed FTSE 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 Wahed FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Wahed FTSE.

Diversification Opportunities for GraniteShares ETF and Wahed FTSE

0.53

Correlation Coefficient

GraniteShares ETF  Wahed FTSE

Very weak diversification

The 3 months correlation between GraniteShares and Wahed is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF Trust and Wahed FTSE USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahed FTSE USA 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 Wahed FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahed FTSE USA has no effect on the direction of GraniteShares ETF i.e., GraniteShares ETF and Wahed FTSE go up and down completely randomly.

Pair Corralation between GraniteShares ETF and Wahed FTSE

Given the investment horizon of 90 days GraniteShares ETF Trust is expected to under-perform the Wahed FTSE. In addition to that, GraniteShares ETF is 9.65 times more volatile than Wahed FTSE USA. It trades about -0.12 of its total potential returns per unit of risk. Wahed FTSE USA is currently generating about -0.05 per unit of volatility. If you would invest  5,364  in Wahed FTSE USA on December 1, 2024 and sell it today you would lose (149.00) from holding Wahed FTSE USA or give up 2.78% of portfolio value over 90 days.

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

GraniteShares ETF Trust  vs.  Wahed FTSE USA

GraniteShares ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days GraniteShares ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Wahed FTSE USA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wahed FTSE USA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Wahed FTSE is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with GraniteShares ETF and Wahed FTSE

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

The idea behind GraniteShares ETF Trust and Wahed FTSE USA 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.