Correlation Between Soybean Meal and Oat Futures
Can any of the company-specific risk be diversified away by investing in both Soybean Meal and Oat Futures 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 Soybean Meal and Oat Futures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soybean Meal Futures and Oat Futures, you can compare the effects of market volatilities on Soybean Meal and Oat Futures 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 Soybean Meal with a short position of Oat Futures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soybean Meal and Oat Futures.
Diversification Opportunities for Soybean Meal and Oat Futures
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Soybean and Oat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Soybean Meal Futures and Oat Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oat Futures and Soybean Meal 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 Soybean Meal Futures are associated (or correlated) with Oat Futures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oat Futures has no effect on the direction of Soybean Meal i.e., Soybean Meal and Oat Futures go up and down completely randomly.
Pair Corralation between Soybean Meal and Oat Futures
If you would invest 33,025 in Oat Futures on January 14, 2025 and sell it today you would earn a total of 1,550 from holding Oat Futures or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.2% |
| Values | Daily Returns |
Soybean Meal Futures vs. Oat Futures
Performance |
| Timeline |
| Soybean Meal Futures |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Oat Futures |
Soybean Meal and Oat Futures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soybean Meal and Oat Futures
The main advantage of trading using opposite Soybean Meal and Oat Futures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soybean Meal position performs unexpectedly, Oat Futures 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 Oat Futures will offset losses from the drop in Oat Futures' long position.| Soybean Meal vs. Wheat Futures | Soybean Meal vs. Sugar | Soybean Meal vs. Soybean Futures | Soybean Meal vs. Corn Futures |
| Oat Futures vs. Platinum | Oat Futures vs. Soybean Futures | Oat Futures vs. E Mini SP 500 | Oat Futures vs. 30 Year Treasury |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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