Correlation Between USCF Gold and BlackRock Floating

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

By analyzing existing cross correlation between USCF Gold Strategy and BlackRock Floating Rate, you can compare the effects of market volatilities on USCF Gold and BlackRock Floating 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 USCF Gold with a short position of BlackRock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF Gold and BlackRock Floating.

Diversification Opportunities for USCF Gold and BlackRock Floating

0.85

Correlation Coefficient

USCF Gold  BlackRock Floating

Very poor diversification

The 3 months correlation between USCF and BlackRock is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding USCF Gold Strategy and BlackRock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Floating Rate and USCF Gold 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 USCF Gold Strategy are associated (or correlated) with BlackRock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Floating Rate has no effect on the direction of USCF Gold i.e., USCF Gold and BlackRock Floating go up and down completely randomly.

Pair Corralation between USCF Gold and BlackRock Floating

Given the investment horizon of 90 days USCF Gold is expected to generate 1.11 times less return on investment than BlackRock Floating. But when comparing it to its historical volatility, USCF Gold Strategy is 1.05 times less risky than BlackRock Floating. It trades about 0.1 of its potential returns per unit of risk. BlackRock Floating Rate is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  960.00  in BlackRock Floating Rate on August 31, 2024 and sell it today you would earn a total of  347.00  from holding BlackRock Floating Rate or generate 36.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	86.36%
Values	Daily Returns

USCF Gold Strategy  vs.  BlackRock Floating Rate

USCF Gold Strategy

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days USCF Gold Strategy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile fundamental indicators, USCF Gold showed solid returns over the last few months and may actually be approaching a breakup point.

BlackRock Floating Rate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Floating Rate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, BlackRock Floating is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with USCF Gold and BlackRock Floating

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

The idea behind USCF Gold Strategy and BlackRock Floating Rate 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..