Correlation Between Roundhill ETF and FundX ETF
Can any of the company-specific risk be diversified away by investing in both Roundhill ETF and FundX ETF 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 ETF and FundX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roundhill ETF Trust and FundX ETF, you can compare the effects of market volatilities on Roundhill ETF and FundX ETF 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 ETF with a short position of FundX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill ETF and FundX ETF.
Diversification Opportunities for Roundhill ETF and FundX ETF
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Roundhill and FundX is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill ETF Trust and FundX ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FundX ETF and Roundhill ETF 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 ETF Trust are associated (or correlated) with FundX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FundX ETF has no effect on the direction of Roundhill ETF i.e., Roundhill ETF and FundX ETF go up and down completely randomly.
Pair Corralation between Roundhill ETF and FundX ETF
Given the investment horizon of 90 days Roundhill ETF is expected to generate 1.02 times less return on investment than FundX ETF. But when comparing it to its historical volatility, Roundhill ETF Trust is 1.48 times less risky than FundX ETF. It trades about 0.17 of its potential returns per unit of risk. FundX ETF is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,165 in FundX ETF on November 3, 2024 and sell it today you would earn a total of 211.00 from holding FundX ETF or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roundhill ETF Trust vs. FundX ETF
Performance |
| Timeline |
| Roundhill ETF Trust |
| FundX ETF |
Roundhill ETF and FundX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill ETF and FundX ETF
The main advantage of trading using opposite Roundhill ETF and FundX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill ETF position performs unexpectedly, FundX ETF 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 FundX ETF will offset losses from the drop in FundX ETF's long position.| Roundhill ETF vs. FT Vest Equity | Roundhill ETF vs. Northern Lights | Roundhill ETF vs. Dimensional International High | Roundhill ETF vs. First Trust Exchange Traded |
| FundX ETF vs. FT Vest Equity | FundX ETF vs. Northern Lights | FundX ETF vs. Dimensional International High | FundX ETF vs. First Trust Exchange Traded |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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