Correlation Between Teucrium Soybean and Listed Funds
Can any of the company-specific risk be diversified away by investing in both Teucrium Soybean and Listed Funds 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 Listed Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teucrium Soybean and Listed Funds Trust, you can compare the effects of market volatilities on Teucrium Soybean and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teucrium Soybean and Listed Funds.
Diversification Opportunities for Teucrium Soybean and Listed Funds
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teucrium and Listed is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Teucrium Soybean and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Teucrium Soybean i.e., Teucrium Soybean and Listed Funds go up and down completely randomly.
Pair Corralation between Teucrium Soybean and Listed Funds
Given the investment horizon of 90 days Teucrium Soybean is expected to under-perform the Listed Funds. In addition to that, Teucrium Soybean is 1.13 times more volatile than Listed Funds Trust. It trades about -0.05 of its total potential returns per unit of risk. Listed Funds Trust is currently generating about -0.03 per unit of volatility. If you would invest 2,261 in Listed Funds Trust on August 30, 2024 and sell it today you would lose (328.00) from holding Listed Funds Trust or give up 14.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teucrium Soybean vs. Listed Funds Trust
Performance |
| Timeline |
| Teucrium Soybean |
| Listed Funds Trust |
Teucrium Soybean and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teucrium Soybean and Listed Funds
The main advantage of trading using opposite Teucrium Soybean and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teucrium Soybean position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| Teucrium Soybean vs. iShares Silver Trust | Teucrium Soybean vs. VanEck Gold Miners | Teucrium Soybean vs. SPDR SP 500 | Teucrium Soybean vs. United States Oil |
| Listed Funds vs. Teucrium Agricultural | Listed Funds vs. Teucrium Sugar | Listed Funds vs. Teucrium Soybean | Listed Funds vs. Teucrium Wheat |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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