Correlation Between Roundhill Investments and GraniteShares ETF

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

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

Diversification Opportunities for Roundhill Investments and GraniteShares ETF

0.82

Correlation Coefficient

Roundhill Investments  GraniteShares ETF

Very poor diversification

The 3 months correlation between Roundhill and GraniteShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Investments and GraniteShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares ETF Trust and Roundhill Investments 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 Investments are associated (or correlated) with GraniteShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares ETF Trust has no effect on the direction of Roundhill Investments i.e., Roundhill Investments and GraniteShares ETF go up and down completely randomly.

Pair Corralation between Roundhill Investments and GraniteShares ETF

If you would invest  2,837  in GraniteShares ETF Trust on October 4, 2024 and sell it today you would earn a total of  540.00  from holding GraniteShares ETF Trust or generate 19.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.61%
Values	Daily Returns

Roundhill Investments  vs.  GraniteShares ETF Trust

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 primary indicators, Roundhill Investments is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

GraniteShares ETF Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GraniteShares ETF Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, GraniteShares ETF sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roundhill Investments and GraniteShares ETF

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

The idea behind Roundhill Investments and GraniteShares ETF 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 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.