Correlation Between IShares Select and USCF ETF
Can any of the company-specific risk be diversified away by investing in both IShares Select 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 Select 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 Select Dividend and USCF ETF Trust, you can compare the effects of market volatilities on IShares Select 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 Select with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Select and USCF ETF.
Diversification Opportunities for IShares Select and USCF ETF
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and USCF is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Select Dividend 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 Select 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 Select Dividend 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 Select i.e., IShares Select and USCF ETF go up and down completely randomly.
Pair Corralation between IShares Select and USCF ETF
Considering the 90-day investment horizon iShares Select Dividend is expected to generate 0.98 times more return on investment than USCF ETF. However, iShares Select Dividend is 1.02 times less risky than USCF ETF. It trades about 0.18 of its potential returns per unit of risk. USCF ETF Trust is currently generating about 0.16 per unit of risk. If you would invest 11,984 in iShares Select Dividend on August 26, 2024 and sell it today you would earn a total of 2,224 from holding iShares Select Dividend or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Select Dividend vs. USCF ETF Trust
Performance |
| Timeline |
| iShares Select Dividend |
| USCF ETF Trust |
IShares Select and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Select and USCF ETF
The main advantage of trading using opposite IShares Select and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Select 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 Select vs. SPDR SP Dividend | IShares Select vs. Vanguard Dividend Appreciation | IShares Select vs. iShares Core High | IShares Select vs. iShares Preferred and |
| USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. Altrius Global Dividend | USCF ETF vs. Invesco Exchange Traded | USCF ETF vs. Franklin International Core |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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