Correlation Between US Commodity and AdvisorShares Pure

Can any of the company-specific risk be diversified away by investing in both US Commodity and AdvisorShares Pure 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 AdvisorShares Pure 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 AdvisorShares Pure Cannabis, you can compare the effects of market volatilities on US Commodity and AdvisorShares Pure 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 AdvisorShares Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Commodity and AdvisorShares Pure.

Diversification Opportunities for US Commodity and AdvisorShares Pure

-0.72

Correlation Coefficient

US Commodity  AdvisorShares Pure

Pay attention - limited upside

The 3 months correlation between ALUM and AdvisorShares is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding US Commodity Funds and AdvisorShares Pure Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Pure 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 AdvisorShares Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Pure has no effect on the direction of US Commodity i.e., US Commodity and AdvisorShares Pure go up and down completely randomly.

Pair Corralation between US Commodity and AdvisorShares Pure

If you would invest  3,321  in US Commodity Funds on September 2, 2024 and sell it today you would earn a total of  0.00  from holding US Commodity Funds or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

US Commodity Funds  vs.  AdvisorShares Pure Cannabis

US Commodity Funds

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days US Commodity Funds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very fragile basic indicators, US Commodity displayed solid returns over the last few months and may actually be approaching a breakup point.

AdvisorShares Pure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdvisorShares Pure Cannabis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with US Commodity and AdvisorShares Pure

The main advantage of trading using opposite US Commodity and AdvisorShares Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Commodity position performs unexpectedly, AdvisorShares Pure 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 AdvisorShares Pure will offset losses from the drop in AdvisorShares Pure's long position.

The idea behind US Commodity Funds and AdvisorShares Pure Cannabis 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.