Which ETFs Are Most Correlated to Latin American Commodities?
Quantitative Analysis of Latin America's Bull Run: Is It Overdone?
ETFs that are most correlated to commodities
There are various ETFs in the Latin America space that are most correlated to commodity movements. The ETFs in the base metal space (DBB) are the iShares Currency Hedged MSCI Mexico (HEWW), the SPDR MSCI Mexico Quality Mix ETF (QMEX), the iShares Latin America 40 (ILF), the iShares MSCI Colombia Capped (ICOL), and the iShares MSCI All Peru Capped (EPU). They have the highest positive correlations of 71.1%, 59.5%, 52%, 50.44%, and 49.8%, respectively.
In the West Texas Intermediate crude space (USO), the ETFs are the Global X MSCI Colombia ETF (GXG), the iShares MSCI Colombia Capped (ICOL), the iShares MSCI Mexico Capped (EWW), the iShares MSCI All Peru Capped (EPU), and the Global X MSCI Argentina ETF (ARGT). They have the highest positive correlations of 75.8%, 67.4%, 64.5%, 63%, and 61.8%, respectively.
Investors who are interested in Latin America can consider the commodity-driven ETFs listed above. Their performance will vary according to their correlation with the commodity.
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