Correlation Between Commodities Strategy and Clifford Capital

Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Clifford Capital 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 Commodities Strategy and Clifford Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Commodities Strategy Fund and Clifford Capital Focused, you can compare the effects of market volatilities on Commodities Strategy and Clifford Capital 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 Commodities Strategy with a short position of Clifford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Clifford Capital.

Diversification Opportunities for Commodities Strategy and Clifford Capital

-0.53

Correlation Coefficient

Commodities Strategy  Clifford Capital

Excellent diversification

The 3 months correlation between Commodities and Clifford is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Clifford Capital Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clifford Capital Focused and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Clifford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clifford Capital Focused has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Clifford Capital go up and down completely randomly.

Pair Corralation between Commodities Strategy and Clifford Capital

Assuming the 90 days horizon Commodities Strategy Fund is expected to under-perform the Clifford Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Commodities Strategy Fund is 1.04 times less risky than Clifford Capital. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Clifford Capital Focused is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,045  in Clifford Capital Focused on February 4, 2024 and sell it today you would earn a total of  36.00  from holding Clifford Capital Focused or generate 3.44% return on investment over 90 days.

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

Commodities Strategy Fund  vs.  Clifford Capital Focused

Commodities Strategy

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Commodities Strategy Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Commodities Strategy may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Clifford Capital Focused

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clifford Capital Focused are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Clifford Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Commodities Strategy and Clifford Capital

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

The idea behind Commodities Strategy Fund and Clifford Capital Focused 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 Managers module to screen money managers from public funds and ETFs managed around the world.