Correlation Between IShares MSCI and GraniteShares ETF

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

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

Diversification Opportunities for IShares MSCI and GraniteShares ETF

-0.38

Correlation Coefficient

IShares MSCI  GraniteShares ETF

Very good diversification

The 3 months correlation between IShares and GraniteShares is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI China and GraniteShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares ETF Trust and IShares MSCI 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 MSCI China are associated (or correlated) with GraniteShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares ETF Trust has no effect on the direction of IShares MSCI i.e., IShares MSCI and GraniteShares ETF go up and down completely randomly.

Pair Corralation between IShares MSCI and GraniteShares ETF

Given the investment horizon of 90 days IShares MSCI is expected to generate 6.77 times less return on investment than GraniteShares ETF. In addition to that, IShares MSCI is 1.08 times more volatile than GraniteShares ETF Trust. It trades about 0.02 of its total potential returns per unit of risk. GraniteShares ETF Trust is currently generating about 0.14 per unit of volatility. If you would invest  3,196  in GraniteShares ETF Trust on October 4, 2024 and sell it today you would earn a total of  181.00  from holding GraniteShares ETF Trust or generate 5.66% return on investment over 90 days.

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

iShares MSCI China  vs.  GraniteShares ETF Trust

iShares MSCI China

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI China 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 technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

GraniteShares ETF Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares ETF Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, GraniteShares ETF sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares MSCI and GraniteShares ETF

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

The idea behind iShares MSCI China and GraniteShares ETF Trust 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 CEOs Directory module to screen CEOs from public companies around the world.