Correlation Between IShares Equal and Hamilton Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Equal and Hamilton Canadian 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 IShares Equal and Hamilton Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Equal Weight and Hamilton Canadian Bank, you can compare the effects of market volatilities on IShares Equal and Hamilton Canadian 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 IShares Equal with a short position of Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Equal and Hamilton Canadian.
Diversification Opportunities for IShares Equal and Hamilton Canadian
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Hamilton is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares Equal Weight and Hamilton Canadian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian Bank and IShares Equal 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 iShares Equal Weight are associated (or correlated) with Hamilton Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Canadian Bank has no effect on the direction of IShares Equal i.e., IShares Equal and Hamilton Canadian go up and down completely randomly.
Pair Corralation between IShares Equal and Hamilton Canadian
Assuming the 90 days trading horizon iShares Equal Weight is expected to generate 0.97 times more return on investment than Hamilton Canadian. However, iShares Equal Weight is 1.03 times less risky than Hamilton Canadian. It trades about 0.21 of its potential returns per unit of risk. Hamilton Canadian Bank is currently generating about 0.2 per unit of risk. If you would invest 1,523 in iShares Equal Weight on September 2, 2024 and sell it today you would earn a total of 593.00 from holding iShares Equal Weight or generate 38.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Equal Weight vs. Hamilton Canadian Bank
Performance |
| Timeline |
| iShares Equal Weight |
| Hamilton Canadian Bank |
IShares Equal and Hamilton Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Equal and Hamilton Canadian
The main advantage of trading using opposite IShares Equal and Hamilton Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Equal position performs unexpectedly, Hamilton Canadian 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 Canadian will offset losses from the drop in Hamilton Canadian's long position.| IShares Equal vs. BMO Canadian Dividend | IShares Equal vs. BMO Covered Call | IShares Equal vs. BMO Canadian High | IShares Equal vs. BMO NASDAQ 100 |
| Hamilton Canadian vs. Hamilton Equity Yield | Hamilton Canadian vs. Hamilton Enhanced Canadian | Hamilton Canadian vs. Hamilton Australian Bank | Hamilton Canadian vs. Hamilton MidSmall Cap Financials |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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