In the commodity market, your risk is diversified. The price of the commodity has nothing to do with the price of others. For example, when shoppers purchase an ear of corn or a bag of wheat flour at a supermarket, most don't pay a lot of attention to where they were grown or milled. It holds all futures contracts for commodities like oil, wheat, corn, aluminum, live cattle, and gold.

The S&P GSCI could be a production-weighted index supported the importance of every commodity within the international economy or the commodities that are produced in bigger quantities, so it is a better gauge of their value in the market place similar to the market-cap weighted indexes for equities.another side Commodities can be used as a hedge against inflation and help with portfolio diversification due to their negative correlation to other asset classes.

Many commodities that investors focus on are raw materials for manufactured finished goods. If you would rather invest in the stock market, you can trade stock in companies that produce a given commodity. That is why it can be said that every commodity used to be brought under commodity. A commodity is also a platform, where the future deals are also determined by analyzing these prices on the basis of old and current prices.

Equities are a preferred investment because they are easier to understand and profit from that are commodities. Equities are bought and sold on the open stock market through Stock Exchanges. Also, Equity shares provide the ownership to the holders, holding equity shares is important in the market as shareholders will directly take part in the management and strategic decision making of the company.

Equities are yours to hold onto for as long as the company remains operational. Your ownership of the company cannot be invalidated, and you own the company for as long as it remains in business. The equity market comparatively has a high amount of liquidity as compared to the commodity market as investment happens within the heap size.

Equity vs commodity markets area unit extremely completely different from one another. Both Equity vs commodity have their own specifications, features and investment terms. Equity contracts have no expiry dates, while commodity contracts have always fixed expiry date on which settlement must take place. Equity markets are less risky as low volatility is there, the Commodity market is highly volatile as a result of the same these are highly risky.

Author's Bio: 

I am a research analyst from Moneymaker research and we provide research bases trading suggestions for Equities and Commodity market. also, we provide Free stock Tips with the help of a resecach expert.