Correlation Between GraniteShares and FIRST TRUST

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

By analyzing existing cross correlation between GraniteShares 3x Long and FIRST TRUST GLOBAL, you can compare the effects of market volatilities on GraniteShares and FIRST TRUST 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 with a short position of FIRST TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and FIRST TRUST.

Diversification Opportunities for GraniteShares and FIRST TRUST

0.37

Correlation Coefficient

GraniteShares  FIRST TRUST

Weak diversification

The 3 months correlation between GraniteShares and FIRST is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Long and FIRST TRUST GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST TRUST GLOBAL and GraniteShares 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 3x Long are associated (or correlated) with FIRST TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST TRUST GLOBAL has no effect on the direction of GraniteShares i.e., GraniteShares and FIRST TRUST go up and down completely randomly.

Pair Corralation between GraniteShares and FIRST TRUST

Assuming the 90 days trading horizon GraniteShares 3x Long is expected to generate 15.71 times more return on investment than FIRST TRUST. However, GraniteShares is 15.71 times more volatile than FIRST TRUST GLOBAL. It trades about 0.17 of its potential returns per unit of risk. FIRST TRUST GLOBAL is currently generating about 0.13 per unit of risk. If you would invest  3,015,000  in GraniteShares 3x Long on April 25, 2025 and sell it today you would earn a total of  2,855,000  from holding GraniteShares 3x Long or generate 94.69% return on investment over 90 days.

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

GraniteShares 3x Long  vs.  FIRST TRUST GLOBAL

GraniteShares 3x Long

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 3x Long are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, GraniteShares unveiled solid returns over the last few months and may actually be approaching a breakup point.

FIRST TRUST GLOBAL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST TRUST GLOBAL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, FIRST TRUST is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GraniteShares and FIRST TRUST

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

The idea behind GraniteShares 3x Long and FIRST TRUST GLOBAL 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.