Correlation Between Roundhill Investments and First Trust
Can any of the company-specific risk be diversified away by investing in both Roundhill Investments 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 Investments 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 Investments and First Trust Exchange Traded, you can compare the effects of market volatilities on Roundhill Investments 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 Investments with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Investments and First Trust.
Diversification Opportunities for Roundhill Investments and First Trust
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roundhill and First is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Investments and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Roundhill Investments 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 Investments 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 Exchange has no effect on the direction of Roundhill Investments i.e., Roundhill Investments and First Trust go up and down completely randomly.
Pair Corralation between Roundhill Investments and First Trust
Given the investment horizon of 90 days Roundhill Investments is expected to generate 1.98 times more return on investment than First Trust. However, Roundhill Investments is 1.98 times more volatile than First Trust Exchange Traded. It trades about 0.17 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.05 per unit of risk. If you would invest 2,956 in Roundhill Investments on November 1, 2024 and sell it today you would earn a total of 1,110 from holding Roundhill Investments or generate 37.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 29.71% |
| Values | Daily Returns |
Roundhill Investments vs. First Trust Exchange Traded
Performance |
| Timeline |
| Roundhill Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Trust Exchange |
Roundhill Investments and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Investments and First Trust
The main advantage of trading using opposite Roundhill Investments and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Investments 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 Investments vs. SoFi Social 50 | Roundhill Investments vs. Global X Blockchain | Roundhill Investments vs. Tuttle Capital Short |
| First Trust vs. Vanguard Total Stock | First Trust vs. SPDR SP 500 | First Trust vs. iShares Core SP | First Trust vs. Vanguard Total Bond |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |