Correlation Between NYSE Composite and USCF ETF
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and USCF ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and USCF ETF Trust, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and USCF ETF.
Diversification Opportunities for NYSE Composite and USCF ETF
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between NYSE and USCF is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and USCF ETF go up and down completely randomly.
Pair Corralation between NYSE Composite and USCF ETF
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.02 times more return on investment than USCF ETF. However, NYSE Composite is 1.02 times more volatile than USCF ETF Trust. It trades about 0.08 of its potential returns per unit of risk. USCF ETF Trust is currently generating about -0.1 per unit of risk. If you would invest 1,518,228 in NYSE Composite on September 5, 2024 and sell it today you would earn a total of 500,353 from holding NYSE Composite or generate 32.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.47% |
| Values | Daily Returns |
NYSE Composite vs. USCF ETF Trust
Performance |
| Timeline |
NYSE Composite and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
USCF ETF Trust
Pair trading matchups for USCF ETF
Pair Trading with NYSE Composite and USCF ETF
The main advantage of trading using opposite NYSE Composite and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Air Products and | NYSE Composite vs. Playtika Holding Corp | NYSE Composite vs. PepsiCo | NYSE Composite vs. NETGEAR |
| USCF ETF vs. ETRACS Bloomberg Commodity | USCF ETF vs. Neuberger Berman Commodity | USCF ETF vs. abrdn Bloomberg All | USCF ETF vs. abrdn Bloomberg All |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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