Correlation Between Consumer Staples and US Commodity
Can any of the company-specific risk be diversified away by investing in both Consumer Staples 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 Consumer Staples and US Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumer Staples Select and US Commodity Funds, you can compare the effects of market volatilities on Consumer Staples 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 Consumer Staples with a short position of US Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumer Staples and US Commodity.
Diversification Opportunities for Consumer Staples and US Commodity
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Consumer and USOU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Staples Select 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 Consumer Staples 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 Consumer Staples Select 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 Consumer Staples i.e., Consumer Staples and US Commodity go up and down completely randomly.
Pair Corralation between Consumer Staples and US Commodity
If you would invest (100.00) in US Commodity Funds on January 20, 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 |
Consumer Staples Select vs. US Commodity Funds
Performance |
Timeline |
Consumer Staples Select |
US Commodity Funds |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Consumer Staples and US Commodity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Consumer Staples and US Commodity
The main advantage of trading using opposite Consumer Staples and US Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumer Staples 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.Consumer Staples vs. Invesco Dynamic Leisure | Consumer Staples vs. Invesco Dynamic Building | Consumer Staples vs. Invesco DWA Utilities | Consumer Staples vs. HUMANA INC |
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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 Managers module to screen money managers from public funds and ETFs managed around the world.
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