Correlation Between Roundhill Investments and IShares Paris

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

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

Diversification Opportunities for Roundhill Investments and IShares Paris

0.0

Correlation Coefficient

Roundhill Investments  IShares Paris

Pay attention - limited upside

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

Pair Corralation between Roundhill Investments and IShares Paris

If you would invest  5,289  in iShares Paris Aligned Climate on November 28, 2024 and sell it today you would earn a total of  223.00  from holding iShares Paris Aligned Climate or generate 4.22% return on investment over 90 days.

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

Roundhill Investments  vs.  iShares Paris Aligned Climate

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.

iShares Paris Aligned

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Paris Aligned Climate are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, IShares Paris is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Roundhill Investments and IShares Paris

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

The idea behind Roundhill Investments and iShares Paris Aligned Climate 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.