Correlation Between SPDR Portfolio and USCF ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and USCF ETF 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 SPDR Portfolio and USCF ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio SP and USCF ETF Trust, you can compare the effects of market volatilities on SPDR Portfolio and USCF ETF 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 SPDR Portfolio with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and USCF ETF.
Diversification Opportunities for SPDR Portfolio and USCF ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and USCF is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF ETF Trust and SPDR Portfolio 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 SPDR Portfolio SP are associated (or correlated) with USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and USCF ETF go up and down completely randomly.
Pair Corralation between SPDR Portfolio and USCF ETF
Given the investment horizon of 90 days SPDR Portfolio is expected to generate 1.29 times less return on investment than USCF ETF. But when comparing it to its historical volatility, SPDR Portfolio SP is 1.2 times less risky than USCF ETF. It trades about 0.16 of its potential returns per unit of risk. USCF ETF Trust is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,659 in USCF ETF Trust on September 1, 2024 and sell it today you would earn a total of 479.00 from holding USCF ETF Trust or generate 18.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR Portfolio SP vs. USCF ETF Trust
Performance |
| Timeline |
| SPDR Portfolio SP |
| USCF ETF Trust |
SPDR Portfolio and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and USCF ETF
The main advantage of trading using opposite SPDR Portfolio and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, USCF ETF 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 USCF ETF will offset losses from the drop in USCF ETF's long position.| SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR SP 600 |
| USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. Altrius Global Dividend | USCF ETF vs. Invesco Exchange Traded | USCF ETF vs. Franklin International Core |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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