Correlation Between Gasoline RBOB and Micro Silver
Can any of the company-specific risk be diversified away by investing in both Gasoline RBOB and Micro Silver 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 Gasoline RBOB and Micro Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gasoline RBOB and Micro Silver Futures, you can compare the effects of market volatilities on Gasoline RBOB and Micro Silver 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 Gasoline RBOB with a short position of Micro Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gasoline RBOB and Micro Silver.
Diversification Opportunities for Gasoline RBOB and Micro Silver
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gasoline and Micro is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Gasoline RBOB and Micro Silver Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Silver Futures and Gasoline RBOB 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 Gasoline RBOB are associated (or correlated) with Micro Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Silver Futures has no effect on the direction of Gasoline RBOB i.e., Gasoline RBOB and Micro Silver go up and down completely randomly.
Pair Corralation between Gasoline RBOB and Micro Silver
Assuming the 90 days horizon Gasoline RBOB is expected to under-perform the Micro Silver. In addition to that, Gasoline RBOB is 1.04 times more volatile than Micro Silver Futures. It trades about -0.02 of its total potential returns per unit of risk. Micro Silver Futures is currently generating about 0.07 per unit of volatility. If you would invest 2,324 in Micro Silver Futures on August 29, 2024 and sell it today you would earn a total of 726.00 from holding Micro Silver Futures or generate 31.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gasoline RBOB vs. Micro Silver Futures
Performance |
| Timeline |
| Gasoline RBOB |
| Micro Silver Futures |
Gasoline RBOB and Micro Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gasoline RBOB and Micro Silver
The main advantage of trading using opposite Gasoline RBOB and Micro Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gasoline RBOB position performs unexpectedly, Micro Silver 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 Micro Silver will offset losses from the drop in Micro Silver's long position.| Gasoline RBOB vs. Mini Dow Jones | Gasoline RBOB vs. Rough Rice Futures | Gasoline RBOB vs. Platinum | Gasoline RBOB vs. Soybean Futures |
| Micro Silver vs. Micro E mini Russell | Micro Silver vs. Heating Oil | Micro Silver vs. Aluminum Futures | Micro Silver vs. Micro Gold Futures |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |