Correlation Between GraniteShares 15x and IShares Short

Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x and IShares Short 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 IShares Short 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 iShares Short Maturity, you can compare the effects of market volatilities on GraniteShares 15x and IShares Short 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 IShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and IShares Short.

Diversification Opportunities for GraniteShares 15x and IShares Short

-0.61

Correlation Coefficient

GraniteShares 15x  IShares Short

Excellent diversification

The 3 months correlation between GraniteShares and IShares is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long and iShares Short Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Short Maturity 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 IShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Short Maturity has no effect on the direction of GraniteShares 15x i.e., GraniteShares 15x and IShares Short go up and down completely randomly.

Pair Corralation between GraniteShares 15x and IShares Short

Given the investment horizon of 90 days GraniteShares 15x Long is expected to generate 78.04 times more return on investment than IShares Short. However, GraniteShares 15x is 78.04 times more volatile than iShares Short Maturity. It trades about 0.1 of its potential returns per unit of risk. iShares Short Maturity is currently generating about 0.35 per unit of risk. If you would invest  4,841  in GraniteShares 15x Long on November 28, 2024 and sell it today you would earn a total of  509.00  from holding GraniteShares 15x Long or generate 10.51% return on investment over 90 days.

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

GraniteShares 15x Long  vs.  iShares Short Maturity

GraniteShares 15x Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days GraniteShares 15x Long has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's fundamental indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

iShares Short Maturity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Short Maturity are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, IShares Short is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GraniteShares 15x and IShares Short

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

The idea behind GraniteShares 15x Long and iShares Short Maturity 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.