Correlation Between Roundhill ETF and JPMorgan BetaBuilders

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

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

Diversification Opportunities for Roundhill ETF and JPMorgan BetaBuilders

-0.45

Correlation Coefficient

Roundhill ETF  JPMorgan BetaBuilders

Very good diversification

The 3 months correlation between Roundhill and JPMorgan is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill ETF Trust and JPMorgan BetaBuilders Internat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders and Roundhill ETF 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 ETF Trust are associated (or correlated) with JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders has no effect on the direction of Roundhill ETF i.e., Roundhill ETF and JPMorgan BetaBuilders go up and down completely randomly.

Pair Corralation between Roundhill ETF and JPMorgan BetaBuilders

Given the investment horizon of 90 days Roundhill ETF Trust is expected to generate 1.0 times more return on investment than JPMorgan BetaBuilders. However, Roundhill ETF is 1.0 times more volatile than JPMorgan BetaBuilders International. It trades about 0.14 of its potential returns per unit of risk. JPMorgan BetaBuilders International is currently generating about -0.09 per unit of risk. If you would invest  3,908  in Roundhill ETF Trust on August 30, 2024 and sell it today you would earn a total of  338.00  from holding Roundhill ETF Trust or generate 8.65% return on investment over 90 days.

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

Roundhill ETF Trust  vs.  JPMorgan BetaBuilders Internat

Roundhill ETF Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roundhill ETF Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Roundhill ETF may actually be approaching a critical reversion point that can send shares even higher in December 2024.

JPMorgan BetaBuilders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan BetaBuilders International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, JPMorgan BetaBuilders is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Roundhill ETF and JPMorgan BetaBuilders

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

The idea behind Roundhill ETF Trust and JPMorgan BetaBuilders International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.