Correlation Between Roundhill Sports and First Trust
Can any of the company-specific risk be diversified away by investing in both Roundhill Sports and First Trust 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 Roundhill Sports and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roundhill Sports Betting and First Trust S Network, you can compare the effects of market volatilities on Roundhill Sports and First Trust 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 Roundhill Sports with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Sports and First Trust.
Diversification Opportunities for Roundhill Sports and First Trust
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roundhill and First is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Sports Betting and First Trust S Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust S and Roundhill Sports 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 Roundhill Sports Betting are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust S has no effect on the direction of Roundhill Sports i.e., Roundhill Sports and First Trust go up and down completely randomly.
Pair Corralation between Roundhill Sports and First Trust
Given the investment horizon of 90 days Roundhill Sports Betting is expected to generate 0.85 times more return on investment than First Trust. However, Roundhill Sports Betting is 1.17 times less risky than First Trust. It trades about 0.42 of its potential returns per unit of risk. First Trust S Network is currently generating about -0.03 per unit of risk. If you would invest 1,844 in Roundhill Sports Betting on August 26, 2024 and sell it today you would earn a total of 164.00 from holding Roundhill Sports Betting or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roundhill Sports Betting vs. First Trust S Network
Performance |
| Timeline |
| Roundhill Sports Betting |
| First Trust S |
Roundhill Sports and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Sports and First Trust
The main advantage of trading using opposite Roundhill Sports and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Sports position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Roundhill Sports vs. VanEck Pharmaceutical ETF | Roundhill Sports vs. VanEck Biotech ETF | Roundhill Sports vs. VanEck Oil Services | Roundhill Sports vs. iShares Consumer Discretionary |
| First Trust vs. KraneShares Electric Vehicles | First Trust vs. First Trust Nasdaq | First Trust vs. VanEck Gaming ETF | First Trust vs. First Trust NASDAQ |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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