Correlation Between USCF SummerHaven and ETRACS Bloomberg
Can any of the company-specific risk be diversified away by investing in both USCF SummerHaven and ETRACS Bloomberg 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 USCF SummerHaven and ETRACS Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USCF SummerHaven Dynamic and ETRACS Bloomberg Commodity, you can compare the effects of market volatilities on USCF SummerHaven and ETRACS Bloomberg 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 USCF SummerHaven with a short position of ETRACS Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF SummerHaven and ETRACS Bloomberg.
Diversification Opportunities for USCF SummerHaven and ETRACS Bloomberg
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USCF and ETRACS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding USCF SummerHaven Dynamic and ETRACS Bloomberg Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS Bloomberg Com and USCF SummerHaven 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 USCF SummerHaven Dynamic are associated (or correlated) with ETRACS Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS Bloomberg Com has no effect on the direction of USCF SummerHaven i.e., USCF SummerHaven and ETRACS Bloomberg go up and down completely randomly.
Pair Corralation between USCF SummerHaven and ETRACS Bloomberg
Given the investment horizon of 90 days USCF SummerHaven Dynamic is expected to generate 0.27 times more return on investment than ETRACS Bloomberg. However, USCF SummerHaven Dynamic is 3.7 times less risky than ETRACS Bloomberg. It trades about 0.24 of its potential returns per unit of risk. ETRACS Bloomberg Commodity is currently generating about 0.0 per unit of risk. If you would invest 1,938 in USCF SummerHaven Dynamic on August 30, 2024 and sell it today you would earn a total of 82.00 from holding USCF SummerHaven Dynamic or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USCF SummerHaven Dynamic vs. ETRACS Bloomberg Commodity
Performance |
| Timeline |
| USCF SummerHaven Dynamic |
| ETRACS Bloomberg Com |
USCF SummerHaven and ETRACS Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USCF SummerHaven and ETRACS Bloomberg
The main advantage of trading using opposite USCF SummerHaven and ETRACS Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USCF SummerHaven position performs unexpectedly, ETRACS Bloomberg 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 ETRACS Bloomberg will offset losses from the drop in ETRACS Bloomberg's long position.| USCF SummerHaven vs. abrdn Bloomberg All | USCF SummerHaven vs. iShares Bloomberg Roll | USCF SummerHaven vs. abrdn Bloomberg All | USCF SummerHaven vs. iShares GSCI Commodity |
| ETRACS Bloomberg vs. abrdn Bloomberg All | ETRACS Bloomberg vs. iShares Bloomberg Roll | ETRACS Bloomberg vs. abrdn Bloomberg All | ETRACS Bloomberg vs. iShares GSCI Commodity |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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