Correlation Between Capital Group and USCF Gold
Can any of the company-specific risk be diversified away by investing in both Capital Group and USCF Gold 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 Capital Group and USCF Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Group Core and USCF Gold Strategy, you can compare the effects of market volatilities on Capital Group and USCF Gold 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 Capital Group with a short position of USCF Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Group and USCF Gold.
Diversification Opportunities for Capital Group and USCF Gold
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and USCF is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Capital Group Core and USCF Gold Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Gold Strategy and Capital Group 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 Capital Group Core are associated (or correlated) with USCF Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Gold Strategy has no effect on the direction of Capital Group i.e., Capital Group and USCF Gold go up and down completely randomly.
Pair Corralation between Capital Group and USCF Gold
Given the investment horizon of 90 days Capital Group Core is expected to generate 0.41 times more return on investment than USCF Gold. However, Capital Group Core is 2.42 times less risky than USCF Gold. It trades about 0.27 of its potential returns per unit of risk. USCF Gold Strategy is currently generating about -0.11 per unit of risk. If you would invest 3,098 in Capital Group Core on September 1, 2024 and sell it today you would earn a total of 98.00 from holding Capital Group Core or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Capital Group Core vs. USCF Gold Strategy
Performance |
| Timeline |
| Capital Group Core |
| USCF Gold Strategy |
Capital Group and USCF Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Group and USCF Gold
The main advantage of trading using opposite Capital Group and USCF Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Group position performs unexpectedly, USCF Gold 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 USCF Gold will offset losses from the drop in USCF Gold's long position.| Capital Group vs. EA Series Trust | Capital Group vs. Northern Lights | Capital Group vs. Northern Lights | Capital Group vs. Northern Lights |
| USCF Gold vs. VictoryShares Small Cap | USCF Gold vs. SPDR Gold Shares | USCF Gold vs. First Trust Equity | USCF Gold vs. SPDR Nuveen Municipal |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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