Correlation Between GraniteShares 15x and Fidelity Sustainable

Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x and Fidelity Sustainable 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 15x and Fidelity Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares 15x Long and Fidelity Sustainable Core, you can compare the effects of market volatilities on GraniteShares 15x and Fidelity Sustainable 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 15x with a short position of Fidelity Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and Fidelity Sustainable.

Diversification Opportunities for GraniteShares 15x and Fidelity Sustainable

-0.82

Correlation Coefficient

GraniteShares 15x  Fidelity Sustainable

Pay attention - limited upside

The 3 months correlation between GraniteShares and Fidelity is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long and Fidelity Sustainable Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sustainable Core and GraniteShares 15x 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 15x Long are associated (or correlated) with Fidelity Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sustainable Core has no effect on the direction of GraniteShares 15x i.e., GraniteShares 15x and Fidelity Sustainable go up and down completely randomly.

Pair Corralation between GraniteShares 15x and Fidelity Sustainable

Given the investment horizon of 90 days GraniteShares 15x Long is expected to generate 12.56 times more return on investment than Fidelity Sustainable. However, GraniteShares 15x is 12.56 times more volatile than Fidelity Sustainable Core. It trades about 0.16 of its potential returns per unit of risk. Fidelity Sustainable Core is currently generating about 0.02 per unit of risk. If you would invest  4,731  in GraniteShares 15x Long on September 3, 2024 and sell it today you would earn a total of  2,485  from holding GraniteShares 15x Long or generate 52.53% return on investment over 90 days.

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

GraniteShares 15x Long  vs.  Fidelity Sustainable Core

GraniteShares 15x Long

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 15x Long are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain fundamental indicators, GraniteShares 15x disclosed solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Sustainable Core

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Sustainable Core are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Fidelity Sustainable 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 15x and Fidelity Sustainable

The main advantage of trading using opposite GraniteShares 15x and Fidelity Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 15x position performs unexpectedly, Fidelity Sustainable 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 Fidelity Sustainable will offset losses from the drop in Fidelity Sustainable's long position.

The idea behind GraniteShares 15x Long and Fidelity Sustainable Core 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.