Correlation Between Roundhill Magnificent and EA Series

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

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

Diversification Opportunities for Roundhill Magnificent and EA Series

-0.7

Correlation Coefficient

Roundhill Magnificent  EA Series

Excellent diversification

The 3 months correlation between Roundhill and STXI is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Magnificent Seven and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and Roundhill Magnificent 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 Magnificent Seven are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Roundhill Magnificent i.e., Roundhill Magnificent and EA Series go up and down completely randomly.

Pair Corralation between Roundhill Magnificent and EA Series

Given the investment horizon of 90 days Roundhill Magnificent Seven is expected to under-perform the EA Series. In addition to that, Roundhill Magnificent is 2.2 times more volatile than EA Series Trust. It trades about -0.12 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.14 per unit of volatility. If you would invest  2,460  in EA Series Trust on December 29, 2024 and sell it today you would earn a total of  178.00  from holding EA Series Trust or generate 7.24% return on investment over 90 days.

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

Roundhill Magnificent Seven  vs.  EA Series Trust

Roundhill Magnificent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roundhill Magnificent Seven has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

EA Series Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EA Series Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, EA Series may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Roundhill Magnificent and EA Series

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

The idea behind Roundhill Magnificent Seven and EA Series 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.