Correlation Between Teucrium Soybean and FT Cboe
Can any of the company-specific risk be diversified away by investing in both Teucrium Soybean and FT Cboe 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 Teucrium Soybean and FT Cboe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teucrium Soybean and FT Cboe Vest, you can compare the effects of market volatilities on Teucrium Soybean and FT Cboe 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 Teucrium Soybean with a short position of FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teucrium Soybean and FT Cboe.
Diversification Opportunities for Teucrium Soybean and FT Cboe
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Teucrium and DSEP is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Teucrium Soybean and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest and Teucrium Soybean 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 Teucrium Soybean are associated (or correlated) with FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of Teucrium Soybean i.e., Teucrium Soybean and FT Cboe go up and down completely randomly.
Pair Corralation between Teucrium Soybean and FT Cboe
Given the investment horizon of 90 days Teucrium Soybean is expected to under-perform the FT Cboe. In addition to that, Teucrium Soybean is 2.69 times more volatile than FT Cboe Vest. It trades about -0.04 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about 0.13 per unit of volatility. If you would invest 3,198 in FT Cboe Vest on November 2, 2024 and sell it today you would earn a total of 928.00 from holding FT Cboe Vest or generate 29.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teucrium Soybean vs. FT Cboe Vest
Performance |
| Timeline |
| Teucrium Soybean |
| FT Cboe Vest |
Teucrium Soybean and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teucrium Soybean and FT Cboe
The main advantage of trading using opposite Teucrium Soybean and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teucrium Soybean position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.| Teucrium Soybean vs. Teucrium Corn | Teucrium Soybean vs. Teucrium Wheat | Teucrium Soybean vs. Teucrium Sugar |
| FT Cboe vs. FT Cboe Vest | FT Cboe vs. FT Cboe Vest | FT Cboe vs. First Trust Exchange Traded | FT Cboe vs. FT Cboe Vest |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |