Correlation Between USCF Gold and IShares Trust
Can any of the company-specific risk be diversified away by investing in both USCF Gold and IShares Trust 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 USCF Gold and IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USCF Gold Strategy and iShares Trust, you can compare the effects of market volatilities on USCF Gold and IShares Trust 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 USCF Gold with a short position of IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF Gold and IShares Trust.
Diversification Opportunities for USCF Gold and IShares Trust
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USCF and IShares is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding USCF Gold Strategy and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust and USCF Gold 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 USCF Gold Strategy are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of USCF Gold i.e., USCF Gold and IShares Trust go up and down completely randomly.
Pair Corralation between USCF Gold and IShares Trust
Given the investment horizon of 90 days USCF Gold Strategy is expected to generate 1.03 times more return on investment than IShares Trust. However, USCF Gold is 1.03 times more volatile than iShares Trust. It trades about 0.29 of its potential returns per unit of risk. iShares Trust is currently generating about 0.2 per unit of risk. If you would invest 2,817 in USCF Gold Strategy on September 5, 2024 and sell it today you would earn a total of 200.00 from holding USCF Gold Strategy or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 37.65% |
| Values | Daily Returns |
USCF Gold Strategy vs. iShares Trust
Performance |
| Timeline |
| USCF Gold Strategy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| iShares Trust |
USCF Gold and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USCF Gold and IShares Trust
The main advantage of trading using opposite USCF Gold and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USCF Gold position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| USCF Gold vs. iShares MSCI Global | USCF Gold vs. Global X Silver | USCF Gold vs. VanEck Junior Gold | USCF Gold vs. Sprott Gold Miners |
| IShares Trust vs. T Rex 2X Long | IShares Trust vs. GraniteShares 15x Long | IShares Trust vs. Direxion Daily NVDA | IShares Trust vs. Volatility Shares Trust |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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