Correlation Between GraniteShares HIPS and DUDE

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

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

Diversification Opportunities for GraniteShares HIPS and DUDE

0.5

Correlation Coefficient

GraniteShares HIPS  DUDE

Very weak diversification

The 3 months correlation between GraniteShares and DUDE is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares HIPS High and DUDE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUDE and GraniteShares HIPS 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 HIPS High are associated (or correlated) with DUDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUDE has no effect on the direction of GraniteShares HIPS i.e., GraniteShares HIPS and DUDE go up and down completely randomly.

Pair Corralation between GraniteShares HIPS and DUDE

If you would invest  2,173  in DUDE on October 4, 2024 and sell it today you would earn a total of  0.00  from holding DUDE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

GraniteShares HIPS High  vs.  DUDE

GraniteShares HIPS High

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days GraniteShares HIPS High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GraniteShares HIPS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

DUDE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUDE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, DUDE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GraniteShares HIPS and DUDE

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

The idea behind GraniteShares HIPS High and DUDE 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.