Correlation Between US Dollar and Oat Futures
Can any of the company-specific risk be diversified away by investing in both US Dollar and Oat Futures 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 US Dollar and Oat Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Dollar and Oat Futures, you can compare the effects of market volatilities on US Dollar and Oat Futures 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 US Dollar with a short position of Oat Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Dollar and Oat Futures.
Diversification Opportunities for US Dollar and Oat Futures
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DXUSD and Oat is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding US Dollar and Oat Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oat Futures and US Dollar 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 US Dollar are associated (or correlated) with Oat Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oat Futures has no effect on the direction of US Dollar i.e., US Dollar and Oat Futures go up and down completely randomly.
Pair Corralation between US Dollar and Oat Futures
Assuming the 90 days horizon US Dollar is expected to generate 1.04 times less return on investment than Oat Futures. But when comparing it to its historical volatility, US Dollar is 5.66 times less risky than Oat Futures. It trades about 0.05 of its potential returns per unit of risk. Oat Futures is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 37,300 in Oat Futures on August 25, 2024 and sell it today you would lose (250.00) from holding Oat Futures or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
US Dollar vs. Oat Futures
Performance |
| Timeline |
| US Dollar |
| Oat Futures |
US Dollar and Oat Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Dollar and Oat Futures
The main advantage of trading using opposite US Dollar and Oat Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Dollar position performs unexpectedly, Oat Futures 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 Oat Futures will offset losses from the drop in Oat Futures' long position.| US Dollar vs. 10 Year T Note Futures | US Dollar vs. Nasdaq 100 | US Dollar vs. Oat Futures | US Dollar vs. Wheat Futures |
| Oat Futures vs. Class III Milk | Oat Futures vs. Orange Juice | Oat Futures vs. US Dollar | Oat Futures vs. Five Year Treasury Note |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |