Correlation Between ETRACS Bloomberg and USCF ETF
Can any of the company-specific risk be diversified away by investing in both ETRACS Bloomberg 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 ETRACS Bloomberg and USCF ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRACS Bloomberg Commodity and USCF ETF Trust, you can compare the effects of market volatilities on ETRACS Bloomberg 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 ETRACS Bloomberg with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS Bloomberg and USCF ETF.
Diversification Opportunities for ETRACS Bloomberg and USCF ETF
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ETRACS and USCF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS Bloomberg 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 ETRACS 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 ETRACS Bloomberg 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 ETRACS Bloomberg i.e., ETRACS Bloomberg and USCF ETF go up and down completely randomly.
Pair Corralation between ETRACS Bloomberg and USCF ETF
Given the investment horizon of 90 days ETRACS Bloomberg Commodity is expected to generate 3.84 times more return on investment than USCF ETF. However, ETRACS Bloomberg is 3.84 times more volatile than USCF ETF Trust. It trades about 0.0 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 2,072 in ETRACS Bloomberg Commodity on September 13, 2024 and sell it today you would lose (12.00) from holding ETRACS Bloomberg Commodity or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ETRACS Bloomberg Commodity vs. USCF ETF Trust
Performance |
| Timeline |
| ETRACS Bloomberg Com |
| USCF ETF Trust |
ETRACS Bloomberg and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETRACS Bloomberg and USCF ETF
The main advantage of trading using opposite ETRACS Bloomberg and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRACS Bloomberg 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.| ETRACS Bloomberg vs. abrdn Bloomberg All | ETRACS Bloomberg vs. GraniteShares Bloomberg Commodity | ETRACS Bloomberg vs. iShares GSCI Commodity | ETRACS Bloomberg vs. abrdn Bloomberg All |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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