Correlation Between IShares MSCI and USCF Gold
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and USCF Gold 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 MSCI and USCF Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Global and USCF Gold Strategy, you can compare the effects of market volatilities on IShares MSCI and USCF Gold 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 MSCI with a short position of USCF Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and USCF Gold.
Diversification Opportunities for IShares MSCI and USCF Gold
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and USCF is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Global and USCF Gold Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Gold Strategy and IShares MSCI 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 MSCI Global are associated (or correlated) with USCF Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Gold Strategy has no effect on the direction of IShares MSCI i.e., IShares MSCI and USCF Gold go up and down completely randomly.
Pair Corralation between IShares MSCI and USCF Gold
Given the investment horizon of 90 days iShares MSCI Global is expected to generate 2.59 times more return on investment than USCF Gold. However, IShares MSCI is 2.59 times more volatile than USCF Gold Strategy. It trades about 0.05 of its potential returns per unit of risk. USCF Gold Strategy is currently generating about 0.1 per unit of risk. If you would invest 2,374 in iShares MSCI Global on August 27, 2024 and sell it today you would earn a total of 767.00 from holding iShares MSCI Global or generate 32.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.4% |
| Values | Daily Returns |
iShares MSCI Global vs. USCF Gold Strategy
Performance |
| Timeline |
| iShares MSCI Global |
| USCF Gold Strategy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
IShares MSCI and USCF Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and USCF Gold
The main advantage of trading using opposite IShares MSCI and USCF Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, USCF Gold 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 Gold will offset losses from the drop in USCF Gold's long position.| IShares MSCI vs. iShares MSCI Global | IShares MSCI vs. iShares MSCI Global | IShares MSCI vs. Sprott Gold Miners | IShares MSCI vs. Sprott Junior Gold |
| USCF Gold vs. iShares MSCI Global | USCF Gold vs. Global X Silver | USCF Gold vs. VanEck Junior Gold | USCF Gold vs. Sprott Gold Miners |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |