Correlation Between US Commodity and MicroSectors FANG
Can any of the company-specific risk be diversified away by investing in both US Commodity and MicroSectors FANG 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 US Commodity and MicroSectors FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Commodity Funds and MicroSectors FANG Index, you can compare the effects of market volatilities on US Commodity and MicroSectors FANG 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 US Commodity with a short position of MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Commodity and MicroSectors FANG.
Diversification Opportunities for US Commodity and MicroSectors FANG
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USOD and MicroSectors is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Commodity Funds and MicroSectors FANG Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG Index and US Commodity 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 US Commodity Funds are associated (or correlated) with MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG Index has no effect on the direction of US Commodity i.e., US Commodity and MicroSectors FANG go up and down completely randomly.
Pair Corralation between US Commodity and MicroSectors FANG
If you would invest (100.00) in US Commodity Funds on February 9, 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 |
US Commodity Funds vs. MicroSectors FANG Index
Performance |
| Timeline |
| US Commodity Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MicroSectors FANG Index |
US Commodity and MicroSectors FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Commodity and MicroSectors FANG
The main advantage of trading using opposite US Commodity and MicroSectors FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Commodity position performs unexpectedly, MicroSectors FANG 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 MicroSectors FANG will offset losses from the drop in MicroSectors FANG's long position.| US Commodity vs. ProShares Ultra Bloomberg | US Commodity vs. Direxion Daily Semiconductor | US Commodity vs. MicroSectors Big Oil | US Commodity vs. Direxion Daily SP |
| MicroSectors FANG vs. Direxion Daily Gold | MicroSectors FANG vs. Direxion Daily Junior | MicroSectors FANG vs. Direxion Daily SP |
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.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |