Correlation Between GraniteShares Bloomberg and USCF SummerHaven

Can any of the company-specific risk be diversified away by investing in both GraniteShares Bloomberg and USCF SummerHaven 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 GraniteShares Bloomberg and USCF SummerHaven into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares Bloomberg Commodity and USCF SummerHaven Dynamic, you can compare the effects of market volatilities on GraniteShares Bloomberg and USCF SummerHaven 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 GraniteShares Bloomberg with a short position of USCF SummerHaven. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares Bloomberg and USCF SummerHaven.

Diversification Opportunities for GraniteShares Bloomberg and USCF SummerHaven

0.97

Correlation Coefficient

GraniteShares Bloomberg  USCF SummerHaven

Almost no diversification

The 3 months correlation between GraniteShares and USCF is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares Bloomberg Commod and USCF SummerHaven Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF SummerHaven Dynamic and GraniteShares Bloomberg 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 GraniteShares Bloomberg Commodity are associated (or correlated) with USCF SummerHaven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF SummerHaven Dynamic has no effect on the direction of GraniteShares Bloomberg i.e., GraniteShares Bloomberg and USCF SummerHaven go up and down completely randomly.

Pair Corralation between GraniteShares Bloomberg and USCF SummerHaven

Given the investment horizon of 90 days GraniteShares Bloomberg is expected to generate 1.12 times less return on investment than USCF SummerHaven. But when comparing it to its historical volatility, GraniteShares Bloomberg Commodity is 1.05 times less risky than USCF SummerHaven. It trades about 0.19 of its potential returns per unit of risk. USCF SummerHaven Dynamic is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,942  in USCF SummerHaven Dynamic on December 30, 2024 and sell it today you would earn a total of  172.00  from holding USCF SummerHaven Dynamic or generate 8.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

GraniteShares Bloomberg Commod  vs.  USCF SummerHaven Dynamic

GraniteShares Bloomberg

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares Bloomberg Commodity are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent primary indicators, GraniteShares Bloomberg may actually be approaching a critical reversion point that can send shares even higher in April 2025.

USCF SummerHaven Dynamic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in USCF SummerHaven Dynamic are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, USCF SummerHaven may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GraniteShares Bloomberg and USCF SummerHaven

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

The idea behind GraniteShares Bloomberg Commodity and USCF SummerHaven Dynamic 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.