Correlation Between Aptus Collared and Roundhill ETF

Can any of the company-specific risk be diversified away by investing in both Aptus Collared and Roundhill 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 Aptus Collared and Roundhill ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aptus Collared Income and Roundhill ETF Trust, you can compare the effects of market volatilities on Aptus Collared and Roundhill 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 Aptus Collared with a short position of Roundhill ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Collared and Roundhill ETF.

Diversification Opportunities for Aptus Collared and Roundhill ETF

0.71

Correlation Coefficient

Aptus Collared  Roundhill ETF

Poor diversification

The 3 months correlation between Aptus and Roundhill is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Collared Income and Roundhill ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill ETF Trust and Aptus Collared 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 Aptus Collared Income are associated (or correlated) with Roundhill ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill ETF Trust has no effect on the direction of Aptus Collared i.e., Aptus Collared and Roundhill ETF go up and down completely randomly.

Pair Corralation between Aptus Collared and Roundhill ETF

Given the investment horizon of 90 days Aptus Collared is expected to generate 1.03 times less return on investment than Roundhill ETF. In addition to that, Aptus Collared is 1.29 times more volatile than Roundhill ETF Trust. It trades about 0.17 of its total potential returns per unit of risk. Roundhill ETF Trust is currently generating about 0.22 per unit of volatility. If you would invest  5,600  in Roundhill ETF Trust on September 2, 2024 and sell it today you would earn a total of  361.00  from holding Roundhill ETF Trust or generate 6.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aptus Collared Income  vs.  Roundhill ETF Trust

Aptus Collared Income

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aptus Collared Income are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Aptus Collared is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Roundhill ETF Trust

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Roundhill ETF Trust are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Roundhill ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aptus Collared and Roundhill ETF

The main advantage of trading using opposite Aptus Collared and Roundhill ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Collared position performs unexpectedly, Roundhill 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 Roundhill ETF will offset losses from the drop in Roundhill ETF's long position.

The idea behind Aptus Collared Income and Roundhill ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.