Correlation Between Hamilton Energy and Hamilton Canadian
Can any of the company-specific risk be diversified away by investing in both Hamilton Energy 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 Hamilton Energy and Hamilton Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Energy Yield and Hamilton Canadian Bank, you can compare the effects of market volatilities on Hamilton Energy 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 Hamilton Energy with a short position of Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Energy and Hamilton Canadian.
Diversification Opportunities for Hamilton Energy and Hamilton Canadian
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hamilton and Hamilton is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Energy Yield 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 Hamilton Energy 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 Hamilton Energy Yield 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 Hamilton Energy i.e., Hamilton Energy and Hamilton Canadian go up and down completely randomly.
Pair Corralation between Hamilton Energy and Hamilton Canadian
Assuming the 90 days trading horizon Hamilton Energy Yield is expected to generate 3.13 times more return on investment than Hamilton Canadian. However, Hamilton Energy is 3.13 times more volatile than Hamilton Canadian Bank. It trades about 0.32 of its potential returns per unit of risk. Hamilton Canadian Bank is currently generating about 0.5 per unit of risk. If you would invest 1,521 in Hamilton Energy Yield on August 31, 2024 and sell it today you would earn a total of 126.00 from holding Hamilton Energy Yield or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Energy Yield vs. Hamilton Canadian Bank
Performance |
| Timeline |
| Hamilton Energy Yield |
| Hamilton Canadian Bank |
Hamilton Energy and Hamilton Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Energy and Hamilton Canadian
The main advantage of trading using opposite Hamilton Energy and Hamilton Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Energy 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.| Hamilton Energy vs. Hamilton Equity Yield | Hamilton Energy vs. Hamilton Enhanced Canadian | Hamilton Energy vs. Hamilton Australian Bank | Hamilton Energy vs. Hamilton MidSmall Cap Financials |
| Hamilton Canadian vs. BMO Covered Call | Hamilton Canadian vs. BMO Canadian Dividend | Hamilton Canadian vs. BMO Covered Call | Hamilton Canadian vs. BMO Canadian High |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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