Correlation Between Roundhill Cannabis and IVSG

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

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

Diversification Opportunities for Roundhill Cannabis and IVSG

0.0

Correlation Coefficient

Roundhill Cannabis  IVSG

Pay attention - limited upside

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

Pair Corralation between Roundhill Cannabis and IVSG

If you would invest  4,008  in Roundhill Cannabis ETF on January 19, 2024 and sell it today you would earn a total of  61.00  from holding Roundhill Cannabis ETF or generate 1.52% return on investment over 90 days.

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

Roundhill Cannabis ETF  vs.  IVSG

Roundhill Cannabis ETF

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Roundhill Cannabis ETF are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Roundhill Cannabis exhibited solid returns over the last few months and may actually be approaching a breakup point.

IVSG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IVSG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IVSG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Roundhill Cannabis and IVSG

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

The idea behind Roundhill Cannabis ETF and IVSG 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.