Correlation Between IShares Commodity and Abrdn ETFs

Can any of the company-specific risk be diversified away by investing in both IShares Commodity and Abrdn ETFs 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 IShares Commodity and Abrdn ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Commodity Curve and abrdn ETFs , you can compare the effects of market volatilities on IShares Commodity and Abrdn ETFs 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 IShares Commodity with a short position of Abrdn ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Commodity and Abrdn ETFs.

Diversification Opportunities for IShares Commodity and Abrdn ETFs

-0.03

Correlation Coefficient

IShares Commodity  Abrdn ETFs

Good diversification

The 3 months correlation between IShares and Abrdn is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding iShares Commodity Curve and abrdn ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn ETFs and IShares 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 iShares Commodity Curve are associated (or correlated) with Abrdn ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn ETFs has no effect on the direction of IShares Commodity i.e., IShares Commodity and Abrdn ETFs go up and down completely randomly.

Pair Corralation between IShares Commodity and Abrdn ETFs

Given the investment horizon of 90 days IShares Commodity is expected to generate 4.06 times less return on investment than Abrdn ETFs. But when comparing it to its historical volatility, iShares Commodity Curve is 1.45 times less risky than Abrdn ETFs. It trades about 0.08 of its potential returns per unit of risk. abrdn ETFs is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  2,010  in abrdn ETFs on December 20, 2024 and sell it today you would earn a total of  224.00  from holding abrdn ETFs or generate 11.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

iShares Commodity Curve  vs.  abrdn ETFs

iShares Commodity Curve

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Commodity Curve are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares Commodity is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

abrdn ETFs

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn ETFs are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent forward indicators, Abrdn ETFs may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IShares Commodity and Abrdn ETFs

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

The idea behind iShares Commodity Curve and abrdn ETFs 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..