Correlation Between 30 Day and Soybean Meal
Can any of the company-specific risk be diversified away by investing in both 30 Day and Soybean Meal 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 30 Day and Soybean Meal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 30 Day Fed and Soybean Meal Futures, you can compare the effects of market volatilities on 30 Day and Soybean Meal 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 30 Day with a short position of Soybean Meal. Check out your portfolio center. Please also check ongoing floating volatility patterns of 30 Day and Soybean Meal.
Diversification Opportunities for 30 Day and Soybean Meal
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZQUSD and Soybean is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding 30 Day Fed and Soybean Meal Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soybean Meal Futures and 30 Day 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 30 Day Fed are associated (or correlated) with Soybean Meal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soybean Meal Futures has no effect on the direction of 30 Day i.e., 30 Day and Soybean Meal go up and down completely randomly.
Pair Corralation between 30 Day and Soybean Meal
Assuming the 90 days horizon 30 Day Fed is expected to generate 0.04 times more return on investment than Soybean Meal. However, 30 Day Fed is 22.43 times less risky than Soybean Meal. It trades about 0.03 of its potential returns per unit of risk. Soybean Meal Futures is currently generating about -0.05 per unit of risk. If you would invest 9,433 in 30 Day Fed on November 27, 2024 and sell it today you would earn a total of 135.00 from holding 30 Day Fed or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.23% |
| Values | Daily Returns |
30 Day Fed vs. Soybean Meal Futures
Performance |
| Timeline |
| 30 Day Fed |
| Soybean Meal Futures |
30 Day and Soybean Meal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 30 Day and Soybean Meal
The main advantage of trading using opposite 30 Day and Soybean Meal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 30 Day position performs unexpectedly, Soybean Meal 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 Soybean Meal will offset losses from the drop in Soybean Meal's long position.| 30 Day vs. Platinum | 30 Day vs. Micro Gold Futures | 30 Day vs. 30 Year Treasury | 30 Day vs. 2 Year T Note Futures |
| Soybean Meal vs. Orange Juice | Soybean Meal vs. Micro Gold Futures | Soybean Meal vs. Class III Milk | Soybean Meal vs. Gasoline RBOB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |