Correlation Between Roundhill Investments and SPDR Nuveen
Can any of the company-specific risk be diversified away by investing in both Roundhill Investments and SPDR Nuveen 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 SPDR Nuveen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roundhill Investments and SPDR Nuveen Municipal, you can compare the effects of market volatilities on Roundhill Investments and SPDR Nuveen 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 SPDR Nuveen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Investments and SPDR Nuveen.
Diversification Opportunities for Roundhill Investments and SPDR Nuveen
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roundhill and SPDR is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Investments and SPDR Nuveen Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Nuveen Municipal 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 SPDR Nuveen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Nuveen Municipal has no effect on the direction of Roundhill Investments i.e., Roundhill Investments and SPDR Nuveen go up and down completely randomly.
Pair Corralation between Roundhill Investments and SPDR Nuveen
Given the investment horizon of 90 days Roundhill Investments is expected to generate 10.93 times more return on investment than SPDR Nuveen. However, Roundhill Investments is 10.93 times more volatile than SPDR Nuveen Municipal. It trades about 0.08 of its potential returns per unit of risk. SPDR Nuveen Municipal is currently generating about 0.06 per unit of risk. If you would invest 3,398 in Roundhill Investments on August 27, 2024 and sell it today you would earn a total of 668.00 from holding Roundhill Investments or generate 19.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 25.71% |
| Values | Daily Returns |
Roundhill Investments vs. SPDR Nuveen Municipal
Performance |
| Timeline |
| Roundhill Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPDR Nuveen Municipal |
Roundhill Investments and SPDR Nuveen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Investments and SPDR Nuveen
The main advantage of trading using opposite Roundhill Investments and SPDR Nuveen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Investments position performs unexpectedly, SPDR Nuveen 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 SPDR Nuveen will offset losses from the drop in SPDR Nuveen's long position.| Roundhill Investments vs. SoFi Social 50 | Roundhill Investments vs. Global X Blockchain | Roundhill Investments vs. Tuttle Capital Short |
| SPDR Nuveen vs. SSGA Active Trust | SPDR Nuveen vs. SPDR MarketAxess Investment | SPDR Nuveen vs. SSGA Active Trust |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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