Correlation Between IShares Russell and USCF ETF
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell 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 Russell 1000 and USCF ETF Trust, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and USCF ETF.
Diversification Opportunities for IShares Russell and USCF ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and USCF is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 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 Russell 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 Russell 1000 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 Russell i.e., IShares Russell and USCF ETF go up and down completely randomly.
Pair Corralation between IShares Russell and USCF ETF
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 0.75 times more return on investment than USCF ETF. However, iShares Russell 1000 is 1.33 times less risky than USCF ETF. It trades about 0.3 of its potential returns per unit of risk. USCF ETF Trust is currently generating about 0.18 per unit of risk. If you would invest 18,935 in iShares Russell 1000 on August 30, 2024 and sell it today you would earn a total of 997.00 from holding iShares Russell 1000 or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 1000 vs. USCF ETF Trust
Performance |
| Timeline |
| iShares Russell 1000 |
| USCF ETF Trust |
IShares Russell and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and USCF ETF
The main advantage of trading using opposite IShares Russell and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell Mid Cap |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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