Correlation Between US Commodity and International Business
Can any of the company-specific risk be diversified away by investing in both US Commodity and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on US Commodity and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Commodity and International Business.
Diversification Opportunities for US Commodity and International Business
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between USOU and International is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Commodity Funds and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of US Commodity i.e., US Commodity and International Business go up and down completely randomly.
Pair Corralation between US Commodity and International Business
If you would invest 17,127 in International Business Machines on January 20, 2024 and sell it today you would earn a total of 1,020 from holding International Business Machines or generate 5.96% 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. International Business Machine
Performance |
| Timeline |
| US Commodity Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| International Business |
US Commodity and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Commodity and International Business
The main advantage of trading using opposite US Commodity and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Commodity position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| US Commodity vs. Zillow Group Class | US Commodity vs. Northern Lights | US Commodity vs. VanEck Vectors Moodys | US Commodity vs. BZDYF |
| International Business vs. Information Services Group | International Business vs. Home Bancorp | International Business vs. CRA International | International Business vs. Aquagold International |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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