Correlation Between Roundhill Magnificent and Global X
Can any of the company-specific risk be diversified away by investing in both Roundhill Magnificent and Global X 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 Global X 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 Global X Hydrogen, you can compare the effects of market volatilities on Roundhill Magnificent and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Magnificent and Global X.
Diversification Opportunities for Roundhill Magnificent and Global X
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roundhill and Global is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Magnificent Seven and Global X Hydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Hydrogen 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Hydrogen has no effect on the direction of Roundhill Magnificent i.e., Roundhill Magnificent and Global X go up and down completely randomly.
Pair Corralation between Roundhill Magnificent and Global X
Given the investment horizon of 90 days Roundhill Magnificent Seven is expected to generate 0.59 times more return on investment than Global X. However, Roundhill Magnificent Seven is 1.69 times less risky than Global X. It trades about 0.12 of its potential returns per unit of risk. Global X Hydrogen is currently generating about -0.06 per unit of risk. If you would invest 2,602 in Roundhill Magnificent Seven on August 29, 2024 and sell it today you would earn a total of 2,543 from holding Roundhill Magnificent Seven or generate 97.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roundhill Magnificent Seven vs. Global X Hydrogen
Performance |
| Timeline |
| Roundhill Magnificent |
| Global X Hydrogen |
Roundhill Magnificent and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Magnificent and Global X
The main advantage of trading using opposite Roundhill Magnificent and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Magnificent position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Roundhill Magnificent vs. FT Cboe Vest | Roundhill Magnificent vs. Bitwise Funds Trust | Roundhill Magnificent vs. FT Vest Equity | Roundhill Magnificent vs. Zillow Group Class |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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