Correlation Between Roundhill Magnificent and ProShares Pet
Can any of the company-specific risk be diversified away by investing in both Roundhill Magnificent and ProShares Pet 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 ProShares Pet 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 ProShares Pet Care, you can compare the effects of market volatilities on Roundhill Magnificent and ProShares Pet 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 ProShares Pet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Magnificent and ProShares Pet.
Diversification Opportunities for Roundhill Magnificent and ProShares Pet
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roundhill and ProShares is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Magnificent Seven and ProShares Pet Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Pet Care 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 ProShares Pet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Pet Care has no effect on the direction of Roundhill Magnificent i.e., Roundhill Magnificent and ProShares Pet go up and down completely randomly.
Pair Corralation between Roundhill Magnificent and ProShares Pet
Given the investment horizon of 90 days Roundhill Magnificent Seven is expected to generate 1.51 times more return on investment than ProShares Pet. However, Roundhill Magnificent is 1.51 times more volatile than ProShares Pet Care. It trades about 0.11 of its potential returns per unit of risk. ProShares Pet Care is currently generating about 0.05 per unit of risk. If you would invest 3,124 in Roundhill Magnificent Seven on August 29, 2024 and sell it today you would earn a total of 1,976 from holding Roundhill Magnificent Seven or generate 63.25% 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. ProShares Pet Care
Performance |
| Timeline |
| Roundhill Magnificent |
| ProShares Pet Care |
Roundhill Magnificent and ProShares Pet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Magnificent and ProShares Pet
The main advantage of trading using opposite Roundhill Magnificent and ProShares Pet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Magnificent position performs unexpectedly, ProShares Pet 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 ProShares Pet will offset losses from the drop in ProShares Pet's long position.| Roundhill Magnificent vs. Bitwise Funds Trust | Roundhill Magnificent vs. FT Vest Equity | Roundhill Magnificent vs. Zillow Group Class | Roundhill Magnificent vs. Northern Lights |
| ProShares Pet vs. ProShares Online Retail | ProShares Pet vs. VanEck Video Gaming | ProShares Pet vs. Renaissance IPO ETF | ProShares Pet vs. Invesco Dynamic Leisure |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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