Correlation Between Teucrium Wheat and Teucrium Sugar
Can any of the company-specific risk be diversified away by investing in both Teucrium Wheat 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 Teucrium Wheat and Teucrium Sugar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teucrium Wheat and Teucrium Sugar, you can compare the effects of market volatilities on Teucrium Wheat 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 Teucrium Wheat with a short position of Teucrium Sugar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teucrium Wheat and Teucrium Sugar.
Diversification Opportunities for Teucrium Wheat and Teucrium Sugar
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teucrium and Teucrium is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Teucrium Wheat and Teucrium Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Sugar and Teucrium Wheat 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 Wheat 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 Teucrium Wheat i.e., Teucrium Wheat and Teucrium Sugar go up and down completely randomly.
Pair Corralation between Teucrium Wheat and Teucrium Sugar
Given the investment horizon of 90 days Teucrium Wheat is expected to under-perform the Teucrium Sugar. But the etf apears to be less risky and, when comparing its historical volatility, Teucrium Wheat is 1.02 times less risky than Teucrium Sugar. The etf trades about -0.04 of its potential returns per unit of risk. The Teucrium Sugar is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,435 in Teucrium Sugar on August 27, 2024 and sell it today you would lose (174.00) from holding Teucrium Sugar or give up 12.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teucrium Wheat vs. Teucrium Sugar
Performance |
| Timeline |
| Teucrium Wheat |
| Teucrium Sugar |
Teucrium Wheat and Teucrium Sugar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teucrium Wheat and Teucrium Sugar
The main advantage of trading using opposite Teucrium Wheat and Teucrium Sugar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teucrium Wheat 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.| Teucrium Wheat vs. Teucrium Corn | Teucrium Wheat vs. Teucrium Soybean | Teucrium Wheat vs. Teucrium Sugar | Teucrium Wheat vs. Invesco DB Agriculture |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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