Correlation Between GraniteShares and Vulcan Value

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

By analyzing existing cross correlation between GraniteShares 2x Long and Vulcan Value Partners, you can compare the effects of market volatilities on GraniteShares and Vulcan Value 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 Vulcan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and Vulcan Value.

Diversification Opportunities for GraniteShares and Vulcan Value

0.03

Correlation Coefficient

GraniteShares  Vulcan Value

Significant diversification

The 3 months correlation between GraniteShares and Vulcan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 2x Long and Vulcan Value Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Value Partners 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 2x Long are associated (or correlated) with Vulcan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Value Partners has no effect on the direction of GraniteShares i.e., GraniteShares and Vulcan Value go up and down completely randomly.

Pair Corralation between GraniteShares and Vulcan Value

Given the investment horizon of 90 days GraniteShares 2x Long is expected to generate 10.87 times more return on investment than Vulcan Value. However, GraniteShares is 10.87 times more volatile than Vulcan Value Partners. It trades about 0.03 of its potential returns per unit of risk. Vulcan Value Partners is currently generating about 0.11 per unit of risk. If you would invest  2,575  in GraniteShares 2x Long on May 5, 2025 and sell it today you would lose (400.00) from holding GraniteShares 2x Long or give up 15.53% of portfolio value over 90 days.

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

GraniteShares 2x Long  vs.  Vulcan Value Partners

GraniteShares 2x Long

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares 2x Long are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental indicators, GraniteShares disclosed solid returns over the last few months and may actually be approaching a breakup point.

Vulcan Value Partners

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Value Partners are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Vulcan Value may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with GraniteShares and Vulcan Value

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

The idea behind GraniteShares 2x Long and Vulcan Value Partners 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.