Correlation Between IShares Silver and Teucrium Sugar

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

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

Diversification Opportunities for IShares Silver and Teucrium Sugar

0.75

Correlation Coefficient

IShares Silver  Teucrium Sugar

Poor diversification

The 3 months correlation between IShares and Teucrium is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding iShares Silver Trust and Teucrium Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Sugar and IShares Silver 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 Silver Trust are associated (or correlated) with Teucrium Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Sugar has no effect on the direction of IShares Silver i.e., IShares Silver and Teucrium Sugar go up and down completely randomly.

Pair Corralation between IShares Silver and Teucrium Sugar

Considering the 90-day investment horizon iShares Silver Trust is expected to generate 0.93 times more return on investment than Teucrium Sugar. However, iShares Silver Trust is 1.08 times less risky than Teucrium Sugar. It trades about 0.21 of its potential returns per unit of risk. Teucrium Sugar is currently generating about 0.1 per unit of risk. If you would invest  2,643  in iShares Silver Trust on December 29, 2024 and sell it today you would earn a total of  457.00  from holding iShares Silver Trust or generate 17.29% return on investment over 90 days.

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

iShares Silver Trust  vs.  Teucrium Sugar

iShares Silver Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Silver Trust are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, IShares Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Teucrium Sugar

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Teucrium Sugar are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Teucrium Sugar may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IShares Silver and Teucrium Sugar

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

The idea behind iShares Silver Trust and Teucrium Sugar 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.