Correlation Between ANT and Roundhill Magnificent
Can any of the company-specific risk be diversified away by investing in both ANT and Roundhill Magnificent 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 ANT and Roundhill Magnificent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and Roundhill Magnificent Seven, you can compare the effects of market volatilities on ANT and Roundhill Magnificent 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 ANT with a short position of Roundhill Magnificent. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Roundhill Magnificent.
Diversification Opportunities for ANT and Roundhill Magnificent
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANT and Roundhill is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Roundhill Magnificent Seven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Magnificent and ANT 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 ANT are associated (or correlated) with Roundhill Magnificent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Magnificent has no effect on the direction of ANT i.e., ANT and Roundhill Magnificent go up and down completely randomly.
Pair Corralation between ANT and Roundhill Magnificent
Assuming the 90 days trading horizon ANT is expected to generate 38.37 times more return on investment than Roundhill Magnificent. However, ANT is 38.37 times more volatile than Roundhill Magnificent Seven. It trades about 0.1 of its potential returns per unit of risk. Roundhill Magnificent Seven is currently generating about 0.13 per unit of risk. If you would invest 321.00 in ANT on October 20, 2024 and sell it today you would lose (174.00) from holding ANT or give up 54.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 66.82% |
| Values | Daily Returns |
ANT vs. Roundhill Magnificent Seven
Performance |
| Timeline |
| ANT |
| Roundhill Magnificent |
ANT and Roundhill Magnificent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and Roundhill Magnificent
The main advantage of trading using opposite ANT and Roundhill Magnificent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, Roundhill Magnificent 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 Roundhill Magnificent will offset losses from the drop in Roundhill Magnificent's long position.The idea behind ANT and Roundhill Magnificent Seven 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.| Roundhill Magnificent vs. iShares Dividend and | Roundhill Magnificent vs. Martin Currie Sustainable | Roundhill Magnificent vs. VictoryShares THB Mid | Roundhill Magnificent vs. Mast Global Battery |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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