Correlation Between New Perspective and Hamilton Lane
Can any of the company-specific risk be diversified away by investing in both New Perspective and Hamilton Lane 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 New Perspective and Hamilton Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Hamilton Lane, you can compare the effects of market volatilities on New Perspective and Hamilton Lane 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 New Perspective with a short position of Hamilton Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Hamilton Lane.
Diversification Opportunities for New Perspective and Hamilton Lane
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Hamilton is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Hamilton Lane in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Lane and New Perspective 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 New Perspective Fund are associated (or correlated) with Hamilton Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Lane has no effect on the direction of New Perspective i.e., New Perspective and Hamilton Lane go up and down completely randomly.
Pair Corralation between New Perspective and Hamilton Lane
Assuming the 90 days horizon New Perspective is expected to generate 3.03 times less return on investment than Hamilton Lane. But when comparing it to its historical volatility, New Perspective Fund is 2.17 times less risky than Hamilton Lane. It trades about 0.06 of its potential returns per unit of risk. Hamilton Lane is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,156 in Hamilton Lane on November 4, 2024 and sell it today you would earn a total of 4,762 from holding Hamilton Lane or generate 42.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Hamilton Lane
Performance |
| Timeline |
| New Perspective |
| Hamilton Lane |
New Perspective and Hamilton Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Hamilton Lane
The main advantage of trading using opposite New Perspective and Hamilton Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Hamilton Lane 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 Hamilton Lane will offset losses from the drop in Hamilton Lane's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Hamilton Lane vs. Noah Holdings | Hamilton Lane vs. Alvarium Tiedemann Holdings | Hamilton Lane vs. Blackrock Muniyield | Hamilton Lane vs. Blackrock Muni Intermediate |
Check out your portfolio center.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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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