Correlation Between IShares Consumer and USCF ETF
Can any of the company-specific risk be diversified away by investing in both IShares Consumer 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 Consumer 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 Consumer Discretionary and USCF ETF Trust, you can compare the effects of market volatilities on IShares Consumer 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 Consumer with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Consumer and USCF ETF.
Diversification Opportunities for IShares Consumer and USCF ETF
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and USCF is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Consumer Discretionary 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 Consumer 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 Consumer Discretionary 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 Consumer i.e., IShares Consumer and USCF ETF go up and down completely randomly.
Pair Corralation between IShares Consumer and USCF ETF
Considering the 90-day investment horizon iShares Consumer Discretionary is expected to generate 0.83 times more return on investment than USCF ETF. However, iShares Consumer Discretionary is 1.21 times less risky than USCF ETF. It trades about 0.64 of its potential returns per unit of risk. USCF ETF Trust is currently generating about 0.22 per unit of risk. If you would invest 8,723 in iShares Consumer Discretionary on September 1, 2024 and sell it today you would earn a total of 1,046 from holding iShares Consumer Discretionary or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Consumer Discretionary vs. USCF ETF Trust
Performance |
| Timeline |
| iShares Consumer Dis |
| USCF ETF Trust |
IShares Consumer and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Consumer and USCF ETF
The main advantage of trading using opposite IShares Consumer and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Consumer 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 Consumer vs. iShares Consumer Staples | IShares Consumer vs. iShares Industrials ETF | IShares Consumer vs. iShares Basic Materials | IShares Consumer vs. iShares Utilities ETF |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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