Proper Investment Diversification With All Commodity ETFs and ETNs On The Market

We computed the correlations of the vast majority of commodity ETFs and ETNs on the market for the period October-November 2009. With the drop in value of the US dollar, investors who seek to invest in commodities should check that the commodities are not correlated.

We track all commodity ETFs live here.

Here are the correlations:

(please click to enlarge)

Values near 1.0 and -1.0 indicate high positive or negative correlation (same thing, they are correlated). What investors should look for to achieve diversification iare values near zero.

The most uncorrelated ETFs and ETNs for this period were:

-JJN/AGF

-PWND and GRN (WInd and global carbon! Not really commodities, but interesting ETFs)

-JJT/JJS

-JJC/GRN

-GRN/DBA and DBC

- GRN and JJM

GRN and JJN are quite uncorelated with a good part of ETFs and ETNs.

For your convenience here are the names:

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Please do your own due dilligence.