Correlation Between CoreCommodity Natural and InfraCap MLP

Can any of the company-specific risk be diversified away by investing in both CoreCommodity Natural and InfraCap MLP 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 CoreCommodity Natural and InfraCap MLP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CoreCommodity Natural Resources and InfraCap MLP ETF, you can compare the effects of market volatilities on CoreCommodity Natural and InfraCap MLP 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 CoreCommodity Natural with a short position of InfraCap MLP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreCommodity Natural and InfraCap MLP.

Diversification Opportunities for CoreCommodity Natural and InfraCap MLP

-0.87

Correlation Coefficient

CoreCommodity Natural  InfraCap MLP

Pay attention - limited upside

The 3 months correlation between CoreCommodity and InfraCap is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding CoreCommodity Natural Resource and InfraCap MLP ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfraCap MLP ETF and CoreCommodity Natural 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 CoreCommodity Natural Resources are associated (or correlated) with InfraCap MLP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfraCap MLP ETF has no effect on the direction of CoreCommodity Natural i.e., CoreCommodity Natural and InfraCap MLP go up and down completely randomly.

Pair Corralation between CoreCommodity Natural and InfraCap MLP

Given the investment horizon of 90 days CoreCommodity Natural Resources is expected to generate 0.92 times more return on investment than InfraCap MLP. However, CoreCommodity Natural Resources is 1.09 times less risky than InfraCap MLP. It trades about 0.06 of its potential returns per unit of risk. InfraCap MLP ETF is currently generating about 0.04 per unit of risk. If you would invest  2,522  in CoreCommodity Natural Resources on August 17, 2025 and sell it today you would earn a total of  676.00  from holding CoreCommodity Natural Resources or generate 26.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	68.69%
Values	Daily Returns

CoreCommodity Natural Resource  vs.  InfraCap MLP ETF

CoreCommodity Natural

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCommodity Natural Resources are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, CoreCommodity Natural reported solid returns over the last few months and may actually be approaching a breakup point.

InfraCap MLP ETF

Risk-Adjusted Performance

Weakest

Over the last 90 days InfraCap MLP ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, InfraCap MLP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CoreCommodity Natural and InfraCap MLP

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

The idea behind CoreCommodity Natural Resources and InfraCap MLP ETF 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 Global Correlations module to find global opportunities by holding instruments from different markets.