Correlation Between UGLD and US Commodity
Can any of the company-specific risk be diversified away by investing in both UGLD and US Commodity 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 UGLD and US Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UGLD and US Commodity Funds, you can compare the effects of market volatilities on UGLD and US Commodity 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 UGLD with a short position of US Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of UGLD and US Commodity.
Diversification Opportunities for UGLD and US Commodity
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UGLD and USOU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UGLD and US Commodity Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Commodity Funds and UGLD 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 UGLD are associated (or correlated) with US Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Commodity Funds has no effect on the direction of UGLD i.e., UGLD and US Commodity go up and down completely randomly.
Pair Corralation between UGLD and US Commodity
If you would invest (100.00) in US Commodity Funds on January 25, 2024 and sell it today you would earn a total of 100.00 from holding US Commodity Funds or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
UGLD vs. US Commodity Funds
Performance |
| Timeline |
| UGLD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Commodity Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
UGLD and US Commodity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UGLD and US Commodity
The main advantage of trading using opposite UGLD and US Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UGLD position performs unexpectedly, US Commodity 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 US Commodity will offset losses from the drop in US Commodity's long position.The idea behind UGLD and US Commodity Funds pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| US Commodity vs. ProShares UltraShort Silver | US Commodity vs. ProShares UltraShort Gold | US Commodity vs. VanEck Junior Gold |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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