Correlation Between SPDR SP and Roundhill Sports
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Roundhill Sports 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 SPDR SP and Roundhill Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP Retail and Roundhill Sports Betting, you can compare the effects of market volatilities on SPDR SP and Roundhill Sports 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 SPDR SP with a short position of Roundhill Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Roundhill Sports.
Diversification Opportunities for SPDR SP and Roundhill Sports
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Roundhill is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP Retail and Roundhill Sports Betting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Sports Betting and SPDR SP 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 SPDR SP Retail are associated (or correlated) with Roundhill Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Sports Betting has no effect on the direction of SPDR SP i.e., SPDR SP and Roundhill Sports go up and down completely randomly.
Pair Corralation between SPDR SP and Roundhill Sports
Considering the 90-day investment horizon SPDR SP Retail is expected to generate 1.11 times more return on investment than Roundhill Sports. However, SPDR SP is 1.11 times more volatile than Roundhill Sports Betting. It trades about 0.12 of its potential returns per unit of risk. Roundhill Sports Betting is currently generating about 0.12 per unit of risk. If you would invest 7,642 in SPDR SP Retail on August 26, 2024 and sell it today you would earn a total of 463.00 from holding SPDR SP Retail or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP Retail vs. Roundhill Sports Betting
Performance |
| Timeline |
| SPDR SP Retail |
| Roundhill Sports Betting |
SPDR SP and Roundhill Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Roundhill Sports
The main advantage of trading using opposite SPDR SP and Roundhill Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Roundhill Sports 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 Roundhill Sports will offset losses from the drop in Roundhill Sports' long position.| SPDR SP vs. SPDR SP Homebuilders | SPDR SP vs. Consumer Discretionary Select | SPDR SP vs. SPDR SP Metals | SPDR SP vs. Industrial Select Sector |
| Roundhill Sports vs. VanEck Pharmaceutical ETF | Roundhill Sports vs. VanEck Biotech ETF | Roundhill Sports vs. VanEck Oil Services | Roundhill Sports vs. iShares Transportation Average |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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