In times of unprecedented market volatility, thematic investing could be a smart way to spot the best investment opportunities
Observing the rollercoaster price swings within different markets can make it hard to keep up with the major drivers affecting the price movements of particular assets. Capital.com has embraced this challenge and offers a selection of dedicated thematic indices, including the Oil Portfolio Index, Crypto Index, Corona Anti-virus Index, US Cannabis Index, and the US Airlines Index, which track the performance of the most popular assets within the top-traded markets.
Oil Portfolio Index
In April 2020 we witnessed an unbelievable collapse of the oil price: the major international oil benchmark – West Texas Intermediate (WTI) – plunged to a negative territory of minus $40 per barrel amid the deepest fall in oil demand in 25 years.
According to the latest oil price news, oil market volatility is in full swing. “It will take time before the effects of Covid-19 disappear and the demand for oil returns to normal. The prices change so quickly that no one wants to be on the wrong side of the market’s move,” says David Jones, Chief Market Analyst at Capital.com.
This volatile environment significantly affects oil stocks, putting them under pressure. However, they still provide some attractive trading opportunities. Bringing another attractive opportunity for traders to benefit from the oil market’s volatility, Capital.com offers the Oil Portfolio Index, which consists of the eight leading US Energy stocks, including Chevron (CVX), Exxon Mobil (XOM), ConocoPhillips (COP), Occidental Petroleum (OXY), Canadian Natural Resource Ltd (CNQ), Apache (APA), Noble Energy Inc (NBL) and Whiting Petroleum (WLL). The index serves as the market sentiment indicator towards US oil market growth.
During the unstable economic environment, feverish markets and trembling fiat currency price rates, cryptocurrencies are seen by many as a new safe haven. The Crypto Index, offering the opportunity to trade a basket of cryptocurrencies, rather than multiple individual cryptocurrencies, provides several benefits.
First, it is a more cost-efficient way of trading crypto, as it gives you a wider view on the sector, without the need to open numerous positions on each coin separately. Second, trading the Crypto Index enables you to spread the risk without being exposed to a single coin fluctuation.
The Crypto Index (CRY) consists of the five leading cryptocurrencies in terms of market capitalisation: Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin. They are grouped together and weighted by market capitalisation.
When the value of a particular cryptocurrency within the index moves up, its market cap also grows, raising the value of the crypto index. Conversely, when the crypto price goes down against the US dollar, the value of the Crypto Index falls.
Corona Anti-virus Index
Pharma stocks are gaining popularity as healthcare companies around the world struggle to find a vaccine and effective treatments for Covid-19. The Corona Anti-virus Index consists of the five leading companies conducting research on coronavirus, with positive progress shown so far. They are Johnson & Johnson, Sanofi, Gilead Sciences Inc, GlaxoSmithSciences Inc and Inovio Pharmaceuticals. The index serves as a market sentiment indicator towards the progress of treatments.
US Cannabis Index
With people staying home during the pandemic lockdown, the demand for medical marijuana surged. The Canadian government has classified cannabis as essential to relieve stress during the pandemic. It means that cannabis stocks may bring traders outstanding opportunities, and the index can help to catch them. The US Cannabis Index consists of the key players in the US cannabis industry, including GW Pharmaceuticals PLC Sponsored ADR (GWPH), Innovative Industrial Properties Inc (IIPR), Tilray Inc (TLRY), Cronos Group Inc (CRON) and Corbus Pharmaceuticals Holdings Inc (CRBP).
US Airlines Index
With travel demand down 90% year-on-year, the airlines crisis continues with grounded planes and cancelled flights. Still, airline stocks draw traders’ attention and the US Airlines Index can also bring some attractive trading opportunities. It consists of six leading American airline companies: Southwest Airlines (LUV), Alaska Airlines (ALK), United Airlines (UAL), Delta Air Lines (DAL), American Airlines (AAL) and JetBlue (JBLU).
The bottom line: time to trade smart
Capital.com is an award-winning CFD trading platform designed to make the world of investments more accessible. With the vision of achieving an advanced but user-friendly financial platform, it offers professionals and novices alike from all around the world the ultimate trading experience. At present, there are CFDs on over 2,400 instruments to choose from. The good thing is that with contracts for difference you can speculate on the direction of the underlying asset without actually owning it. You can either take a long or short position, depending on whether you expect the price of an asset to rise or fall. This gives the opportunity to profit from both negative and positive market fluctuations. Whether you require a simple, or more sophisticated approach, Capital.com has all the tools for the job. ν
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.