Correlation Between Fidelity Limited and GraniteShares Platinum

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

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

Diversification Opportunities for Fidelity Limited and GraniteShares Platinum

0.06

Correlation Coefficient

Fidelity Limited  GraniteShares Platinum

Significant diversification

The 3 months correlation between Fidelity and GraniteShares is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Limited Term and GraniteShares Platinum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares Platinum and Fidelity Limited 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 Fidelity Limited Term are associated (or correlated) with GraniteShares Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares Platinum has no effect on the direction of Fidelity Limited i.e., Fidelity Limited and GraniteShares Platinum go up and down completely randomly.

Pair Corralation between Fidelity Limited and GraniteShares Platinum

Given the investment horizon of 90 days Fidelity Limited Term is expected to under-perform the GraniteShares Platinum. But the etf apears to be less risky and, when comparing its historical volatility, Fidelity Limited Term is 10.52 times less risky than GraniteShares Platinum. The etf trades about -0.06 of its potential returns per unit of risk. The GraniteShares Platinum Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  876.00  in GraniteShares Platinum Trust on January 31, 2024 and sell it today you would earn a total of  44.00  from holding GraniteShares Platinum Trust or generate 5.02% return on investment over 90 days.

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

Fidelity Limited Term  vs.  GraniteShares Platinum Trust

Fidelity Limited Term

Risk-Adjusted Performance

0 of 100

Very Weak

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

GraniteShares Platinum

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares Platinum Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GraniteShares Platinum is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Fidelity Limited and GraniteShares Platinum

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

The idea behind Fidelity Limited Term and GraniteShares Platinum Trust 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.