Correlation Between Vanguard Russell and USCF Gold

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

By analyzing existing cross correlation between Vanguard Russell 1000 and USCF Gold Strategy, you can compare the effects of market volatilities on Vanguard Russell and USCF Gold 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 Vanguard Russell with a short position of USCF Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Russell and USCF Gold.

Diversification Opportunities for Vanguard Russell and USCF Gold

0.09

Correlation Coefficient

Vanguard Russell  USCF Gold

Significant diversification

The 3 months correlation between Vanguard and USCF is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Russell 1000 and USCF Gold Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Gold Strategy and Vanguard Russell 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 Vanguard Russell 1000 are associated (or correlated) with USCF Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Gold Strategy has no effect on the direction of Vanguard Russell i.e., Vanguard Russell and USCF Gold go up and down completely randomly.

Pair Corralation between Vanguard Russell and USCF Gold

Given the investment horizon of 90 days Vanguard Russell 1000 is expected to under-perform the USCF Gold. In addition to that, Vanguard Russell is 1.74 times more volatile than USCF Gold Strategy. It trades about 0.0 of its total potential returns per unit of risk. USCF Gold Strategy is currently generating about 0.13 per unit of volatility. If you would invest  2,724  in USCF Gold Strategy on February 11, 2024 and sell it today you would earn a total of  51.00  from holding USCF Gold Strategy or generate 1.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Vanguard Russell 1000  vs.  USCF Gold Strategy

Vanguard Russell 1000

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Russell 1000 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Vanguard Russell is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

USCF Gold Strategy

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in USCF Gold Strategy are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, USCF Gold may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Vanguard Russell and USCF Gold

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

The idea behind Vanguard Russell 1000 and USCF Gold Strategy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.