Correlation Between IShares Bloomberg and USCF SummerHaven
Can any of the company-specific risk be diversified away by investing in both IShares Bloomberg and USCF SummerHaven 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 IShares Bloomberg and USCF SummerHaven into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Bloomberg Roll and USCF SummerHaven Dynamic, you can compare the effects of market volatilities on IShares Bloomberg and USCF SummerHaven 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 IShares Bloomberg with a short position of USCF SummerHaven. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Bloomberg and USCF SummerHaven.
Diversification Opportunities for IShares Bloomberg and USCF SummerHaven
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and USCF is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bloomberg Roll and USCF SummerHaven Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF SummerHaven Dynamic and IShares Bloomberg 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 iShares Bloomberg Roll are associated (or correlated) with USCF SummerHaven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF SummerHaven Dynamic has no effect on the direction of IShares Bloomberg i.e., IShares Bloomberg and USCF SummerHaven go up and down completely randomly.
Pair Corralation between IShares Bloomberg and USCF SummerHaven
Given the investment horizon of 90 days iShares Bloomberg Roll is expected to generate 0.74 times more return on investment than USCF SummerHaven. However, iShares Bloomberg Roll is 1.35 times less risky than USCF SummerHaven. It trades about 0.33 of its potential returns per unit of risk. USCF SummerHaven Dynamic is currently generating about 0.11 per unit of risk. If you would invest 4,916 in iShares Bloomberg Roll on November 28, 2024 and sell it today you would earn a total of 187.00 from holding iShares Bloomberg Roll or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Bloomberg Roll vs. USCF SummerHaven Dynamic
Performance |
| Timeline |
| iShares Bloomberg Roll |
| USCF SummerHaven Dynamic |
IShares Bloomberg and USCF SummerHaven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Bloomberg and USCF SummerHaven
The main advantage of trading using opposite IShares Bloomberg and USCF SummerHaven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bloomberg position performs unexpectedly, USCF SummerHaven 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 SummerHaven will offset losses from the drop in USCF SummerHaven's long position.| IShares Bloomberg vs. abrdn Bloomberg All | IShares Bloomberg vs. GraniteShares Bloomberg Commodity | IShares Bloomberg vs. iShares GSCI Commodity | IShares Bloomberg vs. abrdn Bloomberg All |
| USCF SummerHaven vs. abrdn Bloomberg All | USCF SummerHaven vs. GraniteShares Bloomberg Commodity | USCF SummerHaven vs. iShares Bloomberg Roll | USCF SummerHaven vs. iShares Commodity Curve |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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