Correlation Between Commodities Strategy and Stet California
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Stet California 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 Stet California 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 Stet California Municipal, you can compare the effects of market volatilities on Commodities Strategy and Stet California 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 Stet California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Stet California.
Diversification Opportunities for Commodities Strategy and Stet California
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commodities and STET is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Stet California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet California Municipal 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 Stet California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet California Municipal has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Stet California go up and down completely randomly.
Pair Corralation between Commodities Strategy and Stet California
Assuming the 90 days horizon Commodities Strategy Fund is expected to under-perform the Stet California. In addition to that, Commodities Strategy is 3.49 times more volatile than Stet California Municipal. It trades about -0.12 of its total potential returns per unit of risk. Stet California Municipal is currently generating about 0.21 per unit of volatility. If you would invest 1,017 in Stet California Municipal on September 4, 2024 and sell it today you would earn a total of 11.00 from holding Stet California Municipal or generate 1.08% 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. Stet California Municipal
Performance |
| Timeline |
| Commodities Strategy |
| Stet California Municipal |
Commodities Strategy and Stet California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Stet California
The main advantage of trading using opposite Commodities Strategy and Stet California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Stet California 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 Stet California will offset losses from the drop in Stet California'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 |
| Stet California vs. Simt Multi Asset Accumulation | Stet California vs. Saat Market Growth | Stet California vs. Simt Real Return | Stet California vs. Simt Small Cap |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| CEOs Directory Screen CEOs from public companies around the world |