Correlation Between GraniteShares XOUT and Lifestyle

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

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

Diversification Opportunities for GraniteShares XOUT and Lifestyle

0.7

Correlation Coefficient

GraniteShares XOUT  Lifestyle

Poor diversification

The 3 months correlation between GraniteShares and Lifestyle is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares XOUT Large and Lifestyle Ii Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestyle Ii Aggressive and GraniteShares XOUT 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 XOUT Large are associated (or correlated) with Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestyle Ii Aggressive has no effect on the direction of GraniteShares XOUT i.e., GraniteShares XOUT and Lifestyle go up and down completely randomly.

Pair Corralation between GraniteShares XOUT and Lifestyle

If you would invest  5,077  in GraniteShares XOUT Large on January 26, 2024 and sell it today you would earn a total of  0.00  from holding GraniteShares XOUT Large or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

GraniteShares XOUT Large  vs.  Lifestyle Ii Aggressive

GraniteShares XOUT Large

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days GraniteShares XOUT Large has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, GraniteShares XOUT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lifestyle Ii Aggressive

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lifestyle Ii Aggressive are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lifestyle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GraniteShares XOUT and Lifestyle

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

The idea behind GraniteShares XOUT Large and Lifestyle Ii Aggressive 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.