Correlation Between USCF Gold and First Trust

Can any of the company-specific risk be diversified away by investing in both USCF Gold and First Trust 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 First Trust 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 First Trust Dow, you can compare the effects of market volatilities on USCF Gold and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of USCF Gold and First Trust.

Diversification Opportunities for USCF Gold and First Trust

-0.64

Correlation Coefficient

USCF Gold  First Trust

Excellent diversification

The 3 months correlation between USCF and First is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding USCF Gold Strategy and First Trust Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Dow 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Dow has no effect on the direction of USCF Gold i.e., USCF Gold and First Trust go up and down completely randomly.

Pair Corralation between USCF Gold and First Trust

Given the investment horizon of 90 days USCF Gold Strategy is expected to generate 0.71 times more return on investment than First Trust. However, USCF Gold Strategy is 1.4 times less risky than First Trust. It trades about 0.24 of its potential returns per unit of risk. First Trust Dow is currently generating about -0.15 per unit of risk. If you would invest  4,058  in USCF Gold Strategy on September 4, 2025 and sell it today you would earn a total of  202.57  from holding USCF Gold Strategy or generate 4.99% return on investment over 90 days.

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

USCF Gold Strategy  vs.  First Trust Dow

USCF Gold Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in USCF Gold Strategy are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, USCF Gold showed solid returns over the last few months and may actually be approaching a breakup point.

First Trust Dow

Risk-Adjusted Performance

Weakest

Over the last 90 days First Trust Dow has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, First Trust is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with USCF Gold and First Trust

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

The idea behind USCF Gold Strategy and First Trust Dow 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.