Correlation Between Vanguard Total and Roundhill Bitcoin

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Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Roundhill Bitcoin 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 Vanguard Total and Roundhill Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Bond and Roundhill Bitcoin Covered, you can compare the effects of market volatilities on Vanguard Total and Roundhill Bitcoin 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 Vanguard Total with a short position of Roundhill Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Roundhill Bitcoin.

Diversification Opportunities for Vanguard Total and Roundhill Bitcoin

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Vanguard and Roundhill is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Bond and Roundhill Bitcoin Covered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Bitcoin Covered and Vanguard Total 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 Vanguard Total Bond are associated (or correlated) with Roundhill Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Bitcoin Covered has no effect on the direction of Vanguard Total i.e., Vanguard Total and Roundhill Bitcoin go up and down completely randomly.

Pair Corralation between Vanguard Total and Roundhill Bitcoin

Considering the 90-day investment horizon Vanguard Total Bond is expected to under-perform the Roundhill Bitcoin. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Total Bond is 8.34 times less risky than Roundhill Bitcoin. The etf trades about -0.03 of its potential returns per unit of risk. The Roundhill Bitcoin Covered is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,689  in Roundhill Bitcoin Covered on September 1, 2024 and sell it today you would earn a total of  1,461  from holding Roundhill Bitcoin Covered or generate 39.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.44%
ValuesDaily Returns

Vanguard Total Bond  vs.  Roundhill Bitcoin Covered

 Performance 
       Timeline  
Vanguard Total Bond 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Roundhill Bitcoin Covered are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Roundhill Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Vanguard Total and Roundhill Bitcoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vanguard Total and Roundhill Bitcoin

The main advantage of trading using opposite Vanguard Total and Roundhill Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Roundhill Bitcoin 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 Bitcoin will offset losses from the drop in Roundhill Bitcoin's long position.
The idea behind Vanguard Total Bond and Roundhill Bitcoin Covered 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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