Correlation Between Abrdn Physical and Teucrium Sugar
Can any of the company-specific risk be diversified away by investing in both Abrdn Physical and Teucrium Sugar 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 Abrdn Physical and Teucrium Sugar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between abrdn Physical Gold and Teucrium Sugar, you can compare the effects of market volatilities on Abrdn Physical and Teucrium Sugar 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 Abrdn Physical with a short position of Teucrium Sugar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Physical and Teucrium Sugar.
Diversification Opportunities for Abrdn Physical and Teucrium Sugar
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abrdn and Teucrium is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding abrdn Physical Gold and Teucrium Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Sugar and Abrdn Physical 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 abrdn Physical Gold are associated (or correlated) with Teucrium Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Sugar has no effect on the direction of Abrdn Physical i.e., Abrdn Physical and Teucrium Sugar go up and down completely randomly.
Pair Corralation between Abrdn Physical and Teucrium Sugar
Given the investment horizon of 90 days Abrdn Physical is expected to generate 1.18 times less return on investment than Teucrium Sugar. But when comparing it to its historical volatility, abrdn Physical Gold is 1.54 times less risky than Teucrium Sugar. It trades about 0.12 of its potential returns per unit of risk. Teucrium Sugar is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,163 in Teucrium Sugar on August 26, 2024 and sell it today you would earn a total of 98.00 from holding Teucrium Sugar or generate 8.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
abrdn Physical Gold vs. Teucrium Sugar
Performance |
| Timeline |
| abrdn Physical Gold |
| Teucrium Sugar |
Abrdn Physical and Teucrium Sugar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Physical and Teucrium Sugar
The main advantage of trading using opposite Abrdn Physical and Teucrium Sugar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Physical position performs unexpectedly, Teucrium Sugar 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 Teucrium Sugar will offset losses from the drop in Teucrium Sugar's long position.| Abrdn Physical vs. abrdn Physical Silver | Abrdn Physical vs. GraniteShares Gold Trust | Abrdn Physical vs. SPDR Gold MiniShares | Abrdn Physical vs. abrdn Physical Platinum |
| Teucrium Sugar vs. Aquagold International | Teucrium Sugar vs. Morningstar Unconstrained Allocation | Teucrium Sugar vs. High Yield Municipal Fund | Teucrium Sugar vs. Thrivent High Yield |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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