Correlation Between Dow Jones and Hamilton Lane
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Hamilton Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Hamilton Lane, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Hamilton Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Hamilton Lane.
Diversification Opportunities for Dow Jones and Hamilton Lane
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Hamilton is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Hamilton Lane in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Lane and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Hamilton Lane go up and down completely randomly.
Pair Corralation between Dow Jones and Hamilton Lane
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.75 times less return on investment than Hamilton Lane. But when comparing it to its historical volatility, Dow Jones Industrial is 2.6 times less risky than Hamilton Lane. It trades about 0.08 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 | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Dow Jones Industrial vs. Hamilton Lane
Performance |
| Timeline |
Dow Jones and Hamilton Lane Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Hamilton Lane
Pair trading matchups for Hamilton Lane
Pair Trading with Dow Jones and Hamilton Lane
The main advantage of trading using opposite Dow Jones and Hamilton Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |