Correlation Between Commodities Strategy and Profunds-large Cap
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Profunds-large Cap 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 Commodities Strategy and Profunds-large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Profunds Large Cap Growth, you can compare the effects of market volatilities on Commodities Strategy and Profunds-large Cap 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 Commodities Strategy with a short position of Profunds-large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Profunds-large Cap.
Diversification Opportunities for Commodities Strategy and Profunds-large Cap
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commodities and Profunds-large is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Profunds Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Large Cap and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Profunds-large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Large Cap has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Profunds-large Cap go up and down completely randomly.
Pair Corralation between Commodities Strategy and Profunds-large Cap
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 0.38 times more return on investment than Profunds-large Cap. However, Commodities Strategy Fund is 2.66 times less risky than Profunds-large Cap. It trades about 0.25 of its potential returns per unit of risk. Profunds Large Cap Growth is currently generating about -0.11 per unit of risk. If you would invest 2,973 in Commodities Strategy Fund on October 13, 2024 and sell it today you would earn a total of 72.00 from holding Commodities Strategy Fund or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Profunds Large Cap Growth
Performance |
| Timeline |
| Commodities Strategy |
| Profunds Large Cap |
Commodities Strategy and Profunds-large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Profunds-large Cap
The main advantage of trading using opposite Commodities Strategy and Profunds-large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Profunds-large Cap 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 Profunds-large Cap will offset losses from the drop in Profunds-large Cap's long position.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
| Profunds-large Cap vs. Arrow Managed Futures | Profunds-large Cap vs. Rbb Fund | Profunds-large Cap vs. Alternative Asset Allocation | Profunds-large Cap vs. Commodities Strategy Fund |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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