Correlation Between Dow Jones and Roundhill GLP
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Roundhill GLP 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 Dow Jones and Roundhill GLP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Roundhill GLP 1 Weight, you can compare the effects of market volatilities on Dow Jones and Roundhill GLP 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 Dow Jones with a short position of Roundhill GLP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Roundhill GLP.
Diversification Opportunities for Dow Jones and Roundhill GLP
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Roundhill is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Roundhill GLP 1 Weight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill GLP 1 and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Roundhill GLP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill GLP 1 has no effect on the direction of Dow Jones i.e., Dow Jones and Roundhill GLP go up and down completely randomly.
Pair Corralation between Dow Jones and Roundhill GLP
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.46 times more return on investment than Roundhill GLP. However, Dow Jones Industrial is 2.18 times less risky than Roundhill GLP. It trades about 0.09 of its potential returns per unit of risk. Roundhill GLP 1 Weight is currently generating about 0.01 per unit of risk. If you would invest 3,312,959 in Dow Jones Industrial on November 9, 2024 and sell it today you would earn a total of 1,161,804 from holding Dow Jones Industrial or generate 35.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.58% |
| Values | Daily Returns |
Dow Jones Industrial vs. Roundhill GLP 1 Weight
Performance |
| Timeline |
Dow Jones and Roundhill GLP Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Roundhill GLP 1 Weight
Pair trading matchups for Roundhill GLP
Pair Trading with Dow Jones and Roundhill GLP
The main advantage of trading using opposite Dow Jones and Roundhill GLP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Roundhill GLP 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 GLP will offset losses from the drop in Roundhill GLP's long position.| Dow Jones vs. Douglas Emmett | Dow Jones vs. Todos Medical | Dow Jones vs. Eastern Co | Dow Jones vs. Merit Medical Systems |
| Roundhill GLP vs. Freedom Day Dividend | Roundhill GLP vs. Franklin Templeton ETF | Roundhill GLP vs. iShares MSCI China | Roundhill GLP vs. Tidal Trust II |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Correlations Find global opportunities by holding instruments from different markets |