Correlation Between Tuttle Capital and Roundhill Investments

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

By analyzing existing cross correlation between Tuttle Capital Short and Roundhill Investments, you can compare the effects of market volatilities on Tuttle Capital and Roundhill Investments 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 Tuttle Capital with a short position of Roundhill Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tuttle Capital and Roundhill Investments.

Diversification Opportunities for Tuttle Capital and Roundhill Investments

0.37

Correlation Coefficient

Tuttle Capital  Roundhill Investments

Weak diversification

The 3 months correlation between Tuttle and Roundhill is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tuttle Capital Short and Roundhill Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Investments and Tuttle Capital 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 Tuttle Capital Short are associated (or correlated) with Roundhill Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Investments has no effect on the direction of Tuttle Capital i.e., Tuttle Capital and Roundhill Investments go up and down completely randomly.

Pair Corralation between Tuttle Capital and Roundhill Investments

If you would invest  2,822  in Tuttle Capital Short on September 16, 2024 and sell it today you would earn a total of  1,486  from holding Tuttle Capital Short or generate 52.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Tuttle Capital Short  vs.  Roundhill Investments

Tuttle Capital Short

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tuttle Capital Short are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Tuttle Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Roundhill Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roundhill Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Roundhill Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tuttle Capital and Roundhill Investments

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

The idea behind Tuttle Capital Short and Roundhill Investments 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.