Correlation Between IShares GSCI and USCF ETF
Can any of the company-specific risk be diversified away by investing in both IShares GSCI and USCF 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 IShares GSCI and USCF ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares GSCI Commodity and USCF ETF Trust, you can compare the effects of market volatilities on IShares GSCI and USCF 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 IShares GSCI with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares GSCI and USCF ETF.
Diversification Opportunities for IShares GSCI and USCF ETF
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and USCF is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares GSCI Commodity and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF ETF Trust and IShares GSCI 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 GSCI Commodity are associated (or correlated) with USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of IShares GSCI i.e., IShares GSCI and USCF ETF go up and down completely randomly.
Pair Corralation between IShares GSCI and USCF ETF
Given the investment horizon of 90 days iShares GSCI Commodity is expected to generate 1.05 times more return on investment than USCF ETF. However, IShares GSCI is 1.05 times more volatile than USCF ETF Trust. It trades about 0.1 of its potential returns per unit of risk. USCF ETF Trust is currently generating about -0.11 per unit of risk. If you would invest 2,568 in iShares GSCI Commodity on September 13, 2024 and sell it today you would earn a total of 42.00 from holding iShares GSCI Commodity or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares GSCI Commodity vs. USCF ETF Trust
Performance |
| Timeline |
| iShares GSCI Commodity |
| USCF ETF Trust |
IShares GSCI and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares GSCI and USCF ETF
The main advantage of trading using opposite IShares GSCI and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares GSCI position performs unexpectedly, USCF 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 USCF ETF will offset losses from the drop in USCF ETF's long position.| IShares GSCI vs. Invesco Optimum Yield | IShares GSCI vs. First Trust Global | IShares GSCI vs. iShares ESG Aware | IShares GSCI vs. iShares Fallen Angels |
| USCF ETF vs. Freedom Day Dividend | USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. iShares MSCI China | USCF ETF vs. Tidal Trust II |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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