Correlation Between Roundhill Investments and ProShares UltraShort

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

By analyzing existing cross correlation between Roundhill Investments and ProShares UltraShort Gold, you can compare the effects of market volatilities on Roundhill Investments and ProShares UltraShort 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 ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Investments and ProShares UltraShort.

Diversification Opportunities for Roundhill Investments and ProShares UltraShort

0.0

Correlation Coefficient

Roundhill Investments  ProShares UltraShort

Pay attention - limited upside

The 3 months correlation between Roundhill and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Investments and ProShares UltraShort Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort Gold 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 ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort Gold has no effect on the direction of Roundhill Investments i.e., Roundhill Investments and ProShares UltraShort go up and down completely randomly.

Pair Corralation between Roundhill Investments and ProShares UltraShort

If you would invest (100.00) in Roundhill Investments on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Roundhill Investments or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Roundhill Investments  vs.  ProShares UltraShort Gold

Roundhill Investments

Risk-Adjusted Performance

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.

ProShares UltraShort Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares UltraShort Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Etf's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Pair Trading with Roundhill Investments and ProShares UltraShort

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

The idea behind Roundhill Investments and ProShares UltraShort Gold 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.