Correlation Between Roundhill ETF and Global X
Can any of the company-specific risk be diversified away by investing in both Roundhill ETF and Global X 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 Global X 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 Global X NASDAQ, you can compare the effects of market volatilities on Roundhill ETF and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill ETF and Global X.
Diversification Opportunities for Roundhill ETF and Global X
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Roundhill and Global is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill ETF Trust and Global X NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X NASDAQ 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X NASDAQ has no effect on the direction of Roundhill ETF i.e., Roundhill ETF and Global X go up and down completely randomly.
Pair Corralation between Roundhill ETF and Global X
Given the investment horizon of 90 days Roundhill ETF is expected to generate 1.09 times less return on investment than Global X. In addition to that, Roundhill ETF is 1.32 times more volatile than Global X NASDAQ. It trades about 0.1 of its total potential returns per unit of risk. Global X NASDAQ is currently generating about 0.15 per unit of volatility. If you would invest 3,008 in Global X NASDAQ on September 24, 2024 and sell it today you would earn a total of 202.00 from holding Global X NASDAQ or generate 6.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Roundhill ETF Trust vs. Global X NASDAQ
Performance |
Timeline |
Roundhill ETF Trust |
Global X NASDAQ |
Roundhill ETF and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Roundhill ETF and Global X
The main advantage of trading using opposite Roundhill ETF and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill ETF position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.Roundhill ETF vs. FT Vest Equity | Roundhill ETF vs. Northern Lights | Roundhill ETF vs. Dimensional International High | Roundhill ETF vs. JPMorgan Fundamental Data |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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