Correlation Between US Commodity and Arrow ETF
Can any of the company-specific risk be diversified away by investing in both US Commodity and Arrow ETF 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 US Commodity and Arrow ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Commodity Funds and Arrow ETF Trust, you can compare the effects of market volatilities on US Commodity and Arrow ETF 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 US Commodity with a short position of Arrow ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Commodity and Arrow ETF.
Diversification Opportunities for US Commodity and Arrow ETF
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ALUM and Arrow is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding US Commodity Funds and Arrow ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow ETF Trust and US Commodity 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 US Commodity Funds are associated (or correlated) with Arrow ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow ETF Trust has no effect on the direction of US Commodity i.e., US Commodity and Arrow ETF go up and down completely randomly.
Pair Corralation between US Commodity and Arrow ETF
Given the investment horizon of 90 days US Commodity Funds is expected to generate 3.14 times more return on investment than Arrow ETF. However, US Commodity is 3.14 times more volatile than Arrow ETF Trust. It trades about 0.05 of its potential returns per unit of risk. Arrow ETF Trust is currently generating about 0.08 per unit of risk. If you would invest 2,912 in US Commodity Funds on September 1, 2024 and sell it today you would earn a total of 409.00 from holding US Commodity Funds or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.19% |
| Values | Daily Returns |
US Commodity Funds vs. Arrow ETF Trust
Performance |
| Timeline |
| US Commodity Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Arrow ETF Trust |
US Commodity and Arrow ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Commodity and Arrow ETF
The main advantage of trading using opposite US Commodity and Arrow ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Commodity position performs unexpectedly, Arrow ETF 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 Arrow ETF will offset losses from the drop in Arrow ETF's long position.| US Commodity vs. Goldman Sachs Physical | US Commodity vs. iShares Gold Trust | US Commodity vs. iShares Bloomberg Roll |
| Arrow ETF vs. iShares Morningstar Multi Asset | Arrow ETF vs. Amplify High Income | Arrow ETF vs. First Trust Multi Asset | Arrow ETF vs. SPDR SSgA Income |
Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |