Correlation Between US Commodity and IShares Global
Can any of the company-specific risk be diversified away by investing in both US Commodity and IShares Global 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 IShares Global 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 iShares Global Clean, you can compare the effects of market volatilities on US Commodity and IShares Global 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 IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Commodity and IShares Global.
Diversification Opportunities for US Commodity and IShares Global
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ALUM and IShares is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding US Commodity Funds and iShares Global Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Clean 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 IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Clean has no effect on the direction of US Commodity i.e., US Commodity and IShares Global go up and down completely randomly.
Pair Corralation between US Commodity and IShares Global
Given the investment horizon of 90 days US Commodity Funds is expected to generate 1.49 times more return on investment than IShares Global. However, US Commodity is 1.49 times more volatile than iShares Global Clean. It trades about 0.0 of its potential returns per unit of risk. iShares Global Clean is currently generating about -0.09 per unit of risk. If you would invest 3,414 in US Commodity Funds on September 2, 2024 and sell it today you would lose (93.00) from holding US Commodity Funds or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 73.02% |
| Values | Daily Returns |
US Commodity Funds vs. iShares Global Clean
Performance |
| Timeline |
| US Commodity Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| iShares Global Clean |
US Commodity and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Commodity and IShares Global
The main advantage of trading using opposite US Commodity and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Commodity position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| US Commodity vs. FT Vest Equity | US Commodity vs. Zillow Group Class | US Commodity vs. Northern Lights | US Commodity vs. VanEck Vectors Moodys |
| IShares Global vs. Invesco Solar ETF | IShares Global vs. First Trust NASDAQ | IShares Global vs. Invesco WilderHill Clean | IShares Global vs. Global X Lithium |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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