Correlation Between GraniteShares Bloomberg and IShares Commodity

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

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

Diversification Opportunities for GraniteShares Bloomberg and IShares Commodity

0.91

Correlation Coefficient

GraniteShares Bloomberg  IShares Commodity

Almost no diversification

The 3 months correlation between GraniteShares and IShares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares Bloomberg Commod and iShares Commodity Curve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Commodity Curve and GraniteShares Bloomberg 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 Bloomberg Commodity are associated (or correlated) with IShares Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Commodity Curve has no effect on the direction of GraniteShares Bloomberg i.e., GraniteShares Bloomberg and IShares Commodity go up and down completely randomly.

Pair Corralation between GraniteShares Bloomberg and IShares Commodity

Given the investment horizon of 90 days GraniteShares Bloomberg Commodity is expected to under-perform the IShares Commodity. But the etf apears to be less risky and, when comparing its historical volatility, GraniteShares Bloomberg Commodity is 1.23 times less risky than IShares Commodity. The etf trades about -0.01 of its potential returns per unit of risk. The iShares Commodity Curve is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,957  in iShares Commodity Curve on March 6, 2025 and sell it today you would lose (16.00) from holding iShares Commodity Curve or give up 0.82% of portfolio value over 90 days.

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

GraniteShares Bloomberg Commod  vs.  iShares Commodity Curve

GraniteShares Bloomberg

Risk-Adjusted Performance

Very Weak

Over the last 90 days GraniteShares Bloomberg Commodity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, GraniteShares Bloomberg is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

iShares Commodity Curve

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares Commodity Curve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, IShares Commodity is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with GraniteShares Bloomberg and IShares Commodity

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

The idea behind GraniteShares Bloomberg Commodity and iShares Commodity Curve 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.