Correlation Between IShares Core and GraniteShares 175x

Can any of the company-specific risk be diversified away by investing in both IShares Core and GraniteShares 175x 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 Core and GraniteShares 175x into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Core SP and GraniteShares 175x Long, you can compare the effects of market volatilities on IShares Core and GraniteShares 175x 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 Core with a short position of GraniteShares 175x. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and GraniteShares 175x.

Diversification Opportunities for IShares Core and GraniteShares 175x

0.81

Correlation Coefficient

IShares Core  GraniteShares 175x

Very poor diversification

The 3 months correlation between IShares and GraniteShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and GraniteShares 175x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 175x Long and IShares Core 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 Core SP are associated (or correlated) with GraniteShares 175x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 175x Long has no effect on the direction of IShares Core i.e., IShares Core and GraniteShares 175x go up and down completely randomly.

Pair Corralation between IShares Core and GraniteShares 175x

Considering the 90-day investment horizon IShares Core is expected to generate 15.21 times less return on investment than GraniteShares 175x. But when comparing it to its historical volatility, iShares Core SP is 13.9 times less risky than GraniteShares 175x. It trades about 0.19 of its potential returns per unit of risk. GraniteShares 175x Long is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,665  in GraniteShares 175x Long on September 12, 2024 and sell it today you would earn a total of  2,758  from holding GraniteShares 175x Long or generate 165.65% return on investment over 90 days.

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

iShares Core SP  vs.  GraniteShares 175x Long

iShares Core SP

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core SP are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, IShares Core may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GraniteShares 175x Long

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 175x Long are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, GraniteShares 175x reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares Core and GraniteShares 175x

The main advantage of trading using opposite IShares Core and GraniteShares 175x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, GraniteShares 175x 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 175x will offset losses from the drop in GraniteShares 175x's long position.

The idea behind iShares Core SP and GraniteShares 175x Long 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.