Correlation Between USCF SummerHaven and Dow Jones
Can any of the company-specific risk be diversified away by investing in both USCF SummerHaven and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on USCF SummerHaven and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF SummerHaven and Dow Jones.
Diversification Opportunities for USCF SummerHaven and Dow Jones
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between USCF and Dow is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding USCF SummerHaven Dynamic and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of USCF SummerHaven i.e., USCF SummerHaven and Dow Jones go up and down completely randomly.
Pair Corralation between USCF SummerHaven and Dow Jones
Given the investment horizon of 90 days USCF SummerHaven Dynamic is expected to generate 1.21 times more return on investment than Dow Jones. However, USCF SummerHaven is 1.21 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.21 per unit of risk. If you would invest 2,026 in USCF SummerHaven Dynamic on November 28, 2024 and sell it today you would earn a total of 24.00 from holding USCF SummerHaven Dynamic or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USCF SummerHaven Dynamic vs. Dow Jones Industrial
Performance |
| Timeline |
USCF SummerHaven and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
USCF SummerHaven Dynamic
Pair trading matchups for USCF SummerHaven
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with USCF SummerHaven and Dow Jones
The main advantage of trading using opposite USCF SummerHaven and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USCF SummerHaven position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| USCF SummerHaven vs. abrdn Bloomberg All | USCF SummerHaven vs. GraniteShares Bloomberg Commodity | USCF SummerHaven vs. iShares Bloomberg Roll | USCF SummerHaven vs. iShares Commodity Curve |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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