Correlation Between Oat Futures and 2 Year
Can any of the company-specific risk be diversified away by investing in both Oat Futures and 2 Year 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 Oat Futures and 2 Year into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oat Futures and 2 Year T Note Futures, you can compare the effects of market volatilities on Oat Futures and 2 Year 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 Oat Futures with a short position of 2 Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oat Futures and 2 Year.
Diversification Opportunities for Oat Futures and 2 Year
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oat and ZTUSD is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Oat Futures and 2 Year T Note Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2 Year T and Oat Futures 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 Oat Futures are associated (or correlated) with 2 Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2 Year T has no effect on the direction of Oat Futures i.e., Oat Futures and 2 Year go up and down completely randomly.
Pair Corralation between Oat Futures and 2 Year
Assuming the 90 days horizon Oat Futures is expected to generate 13.99 times more return on investment than 2 Year. However, Oat Futures is 13.99 times more volatile than 2 Year T Note Futures. It trades about 0.0 of its potential returns per unit of risk. 2 Year T Note Futures is currently generating about 0.0 per unit of risk. If you would invest 36,125 in Oat Futures on September 3, 2024 and sell it today you would lose (2,375) from holding Oat Futures or give up 6.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.77% |
| Values | Daily Returns |
Oat Futures vs. 2 Year T Note Futures
Performance |
| Timeline |
| Oat Futures |
| 2 Year T |
Oat Futures and 2 Year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oat Futures and 2 Year
The main advantage of trading using opposite Oat Futures and 2 Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oat Futures position performs unexpectedly, 2 Year 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 2 Year will offset losses from the drop in 2 Year's long position.| Oat Futures vs. Heating Oil | Oat Futures vs. Crude Oil | Oat Futures vs. Aluminum Futures | Oat Futures vs. Corn Futures |
| 2 Year vs. 10 Year T Note Futures | 2 Year vs. Nasdaq 100 | 2 Year vs. Oat Futures | 2 Year vs. Wheat Futures |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |