Correlation Between Abrdn ETFs and IShares Commodity
Can any of the company-specific risk be diversified away by investing in both Abrdn ETFs and IShares Commodity 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 Abrdn ETFs and IShares Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between abrdn ETFs and iShares Commodity Curve, you can compare the effects of market volatilities on Abrdn ETFs and IShares Commodity 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 Abrdn ETFs with a short position of IShares Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn ETFs and IShares Commodity.
Diversification Opportunities for Abrdn ETFs and IShares Commodity
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abrdn and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding abrdn ETFs and iShares Commodity Curve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Commodity Curve and Abrdn ETFs 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 abrdn ETFs are associated (or correlated) with IShares Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Commodity Curve has no effect on the direction of Abrdn ETFs i.e., Abrdn ETFs and IShares Commodity go up and down completely randomly.
Pair Corralation between Abrdn ETFs and IShares Commodity
Given the investment horizon of 90 days abrdn ETFs is expected to under-perform the IShares Commodity. In addition to that, Abrdn ETFs is 1.59 times more volatile than iShares Commodity Curve. It trades about -0.05 of its total potential returns per unit of risk. iShares Commodity Curve is currently generating about 0.03 per unit of volatility. If you would invest 2,074 in iShares Commodity Curve on August 31, 2024 and sell it today you would earn a total of 9.00 from holding iShares Commodity Curve or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
abrdn ETFs vs. iShares Commodity Curve
Performance |
| Timeline |
| abrdn ETFs |
| iShares Commodity Curve |
Abrdn ETFs and IShares Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn ETFs and IShares Commodity
The main advantage of trading using opposite Abrdn ETFs and IShares Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn ETFs position performs unexpectedly, IShares Commodity 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 Commodity will offset losses from the drop in IShares Commodity's long position.| Abrdn ETFs vs. VanEck Merk Gold | Abrdn ETFs vs. Goldman Sachs Physical | Abrdn ETFs vs. iShares Gold Trust | Abrdn ETFs vs. iShares Bloomberg Roll |
| IShares Commodity vs. Invesco DB Agriculture | IShares Commodity vs. iShares SP GSCI | IShares Commodity vs. Invesco DB Base | IShares Commodity vs. iPath Bloomberg Commodity |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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