Correlation Between USCF Midstream and AdvisorShares Trust
Can any of the company-specific risk be diversified away by investing in both USCF Midstream and AdvisorShares Trust 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 Midstream and AdvisorShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USCF Midstream Energy and AdvisorShares Trust , you can compare the effects of market volatilities on USCF Midstream and AdvisorShares Trust 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 Midstream with a short position of AdvisorShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF Midstream and AdvisorShares Trust.
Diversification Opportunities for USCF Midstream and AdvisorShares Trust
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USCF and AdvisorShares is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding USCF Midstream Energy and AdvisorShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Trust and USCF Midstream 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 Midstream Energy are associated (or correlated) with AdvisorShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Trust has no effect on the direction of USCF Midstream i.e., USCF Midstream and AdvisorShares Trust go up and down completely randomly.
Pair Corralation between USCF Midstream and AdvisorShares Trust
Considering the 90-day investment horizon USCF Midstream Energy is expected to generate 0.14 times more return on investment than AdvisorShares Trust. However, USCF Midstream Energy is 7.25 times less risky than AdvisorShares Trust. It trades about 0.62 of its potential returns per unit of risk. AdvisorShares Trust is currently generating about -0.05 per unit of risk. If you would invest 4,893 in USCF Midstream Energy on October 21, 2024 and sell it today you would earn a total of 511.00 from holding USCF Midstream Energy or generate 10.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USCF Midstream Energy vs. AdvisorShares Trust
Performance |
| Timeline |
| USCF Midstream Energy |
| AdvisorShares Trust |
USCF Midstream and AdvisorShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USCF Midstream and AdvisorShares Trust
The main advantage of trading using opposite USCF Midstream and AdvisorShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USCF Midstream position performs unexpectedly, AdvisorShares Trust 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 AdvisorShares Trust will offset losses from the drop in AdvisorShares Trust's long position.| USCF Midstream vs. EA Series Trust | USCF Midstream vs. ETF Opportunities Trust | USCF Midstream vs. Global X MLP | USCF Midstream vs. indie Semiconductor |
| AdvisorShares Trust vs. ProShares Ultra SP500 | AdvisorShares Trust vs. Direxion Daily SP500 | AdvisorShares Trust vs. ProShares Ultra QQQ | AdvisorShares Trust vs. ProShares UltraPro SP500 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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