Correlation Between VanEck Gaming and Roundhill Video

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

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

Diversification Opportunities for VanEck Gaming and Roundhill Video

-0.11

Correlation Coefficient

VanEck Gaming  Roundhill Video

Good diversification

The 3 months correlation between VanEck and Roundhill is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Gaming ETF and Roundhill Video Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Video Games and VanEck Gaming 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 VanEck Gaming ETF are associated (or correlated) with Roundhill Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Video Games has no effect on the direction of VanEck Gaming i.e., VanEck Gaming and Roundhill Video go up and down completely randomly.

Pair Corralation between VanEck Gaming and Roundhill Video

Considering the 90-day investment horizon VanEck Gaming ETF is expected to under-perform the Roundhill Video. But the etf apears to be less risky and, when comparing its historical volatility, VanEck Gaming ETF is 1.38 times less risky than Roundhill Video. The etf trades about -0.35 of its potential returns per unit of risk. The Roundhill Video Games is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  2,063  in Roundhill Video Games on October 10, 2024 and sell it today you would lose (85.00) from holding Roundhill Video Games or give up 4.12% of portfolio value over 90 days.

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

VanEck Gaming ETF  vs.  Roundhill Video Games

VanEck Gaming ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Gaming ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Etf's forward-looking indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Roundhill Video Games

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Roundhill Video Games are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Roundhill Video exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VanEck Gaming and Roundhill Video

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

The idea behind VanEck Gaming ETF and Roundhill Video Games 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 CEOs Directory module to screen CEOs from public companies around the world.