Correlation Between Hamilton Australian and Hamilton REITs
Can any of the company-specific risk be diversified away by investing in both Hamilton Australian and Hamilton REITs 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 Australian and Hamilton REITs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Australian Bank and Hamilton REITs YIELD, you can compare the effects of market volatilities on Hamilton Australian and Hamilton REITs 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 Australian with a short position of Hamilton REITs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Australian and Hamilton REITs.
Diversification Opportunities for Hamilton Australian and Hamilton REITs
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hamilton and Hamilton is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Australian Bank and Hamilton REITs YIELD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton REITs YIELD and Hamilton Australian 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 Australian Bank are associated (or correlated) with Hamilton REITs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton REITs YIELD has no effect on the direction of Hamilton Australian i.e., Hamilton Australian and Hamilton REITs go up and down completely randomly.
Pair Corralation between Hamilton Australian and Hamilton REITs
Assuming the 90 days trading horizon Hamilton Australian Bank is expected to generate 1.03 times more return on investment than Hamilton REITs. However, Hamilton Australian is 1.03 times more volatile than Hamilton REITs YIELD. It trades about 0.36 of its potential returns per unit of risk. Hamilton REITs YIELD is currently generating about -0.03 per unit of risk. If you would invest 2,829 in Hamilton Australian Bank on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Hamilton Australian Bank or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Australian Bank vs. Hamilton REITs YIELD
Performance |
| Timeline |
| Hamilton Australian Bank |
| Hamilton REITs YIELD |
Hamilton Australian and Hamilton REITs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Australian and Hamilton REITs
The main advantage of trading using opposite Hamilton Australian and Hamilton REITs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Australian position performs unexpectedly, Hamilton REITs 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 REITs will offset losses from the drop in Hamilton REITs' long position.| Hamilton Australian vs. Brompton Global Dividend | Hamilton Australian vs. Tech Leaders Income | Hamilton Australian vs. Global Healthcare Income | Hamilton Australian vs. Brompton European Dividend |
| Hamilton REITs vs. Hamilton Equity Yield | Hamilton REITs vs. Hamilton Enhanced Canadian | Hamilton REITs vs. Hamilton Australian Bank | Hamilton REITs 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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