Correlation Between Roundhill Magnificent and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Roundhill Magnificent and Goldman Sachs 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 Magnificent and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roundhill Magnificent Seven and Goldman Sachs ETF, you can compare the effects of market volatilities on Roundhill Magnificent and Goldman Sachs 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 Magnificent with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Magnificent and Goldman Sachs.
Diversification Opportunities for Roundhill Magnificent and Goldman Sachs
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Roundhill and Goldman is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Magnificent Seven and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ETF and Roundhill Magnificent 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 Magnificent Seven are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs ETF has no effect on the direction of Roundhill Magnificent i.e., Roundhill Magnificent and Goldman Sachs go up and down completely randomly.
Pair Corralation between Roundhill Magnificent and Goldman Sachs
Given the investment horizon of 90 days Roundhill Magnificent Seven is expected to generate 3.31 times more return on investment than Goldman Sachs. However, Roundhill Magnificent is 3.31 times more volatile than Goldman Sachs ETF. It trades about 0.25 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about 0.13 per unit of risk. If you would invest 4,746 in Roundhill Magnificent Seven on September 1, 2024 and sell it today you would earn a total of 354.00 from holding Roundhill Magnificent Seven or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Roundhill Magnificent Seven vs. Goldman Sachs ETF
Performance |
| Timeline |
| Roundhill Magnificent |
| Goldman Sachs ETF |
Roundhill Magnificent and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Magnificent and Goldman Sachs
The main advantage of trading using opposite Roundhill Magnificent and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Magnificent position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Roundhill Magnificent vs. Robo Global Robotics | Roundhill Magnificent vs. Bitwise Funds Trust | Roundhill Magnificent vs. FT Vest Equity | Roundhill Magnificent vs. Zillow Group Class |
| Goldman Sachs vs. iShares JP Morgan | Goldman Sachs vs. SPDR Bloomberg Barclays | Goldman Sachs vs. SPDR DoubleLine Emerging | Goldman Sachs vs. JPMorgan USD Emerging |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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