Correlation Between Hamilton Canadian and Brompton Global
Can any of the company-specific risk be diversified away by investing in both Hamilton Canadian and Brompton Global 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 Canadian and Brompton Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Canadian Bank and Brompton Global Dividend, you can compare the effects of market volatilities on Hamilton Canadian and Brompton Global 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 Canadian with a short position of Brompton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Canadian and Brompton Global.
Diversification Opportunities for Hamilton Canadian and Brompton Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hamilton and Brompton is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Canadian Bank and Brompton Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Global Dividend and Hamilton Canadian 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 Canadian Bank are associated (or correlated) with Brompton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Global Dividend has no effect on the direction of Hamilton Canadian i.e., Hamilton Canadian and Brompton Global go up and down completely randomly.
Pair Corralation between Hamilton Canadian and Brompton Global
Assuming the 90 days trading horizon Hamilton Canadian is expected to generate 1.01 times less return on investment than Brompton Global. But when comparing it to its historical volatility, Hamilton Canadian Bank is 1.78 times less risky than Brompton Global. It trades about 0.22 of its potential returns per unit of risk. Brompton Global Dividend is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,188 in Brompton Global Dividend on August 29, 2024 and sell it today you would earn a total of 97.00 from holding Brompton Global Dividend or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Canadian Bank vs. Brompton Global Dividend
Performance |
| Timeline |
| Hamilton Canadian Bank |
| Brompton Global Dividend |
Hamilton Canadian and Brompton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Canadian and Brompton Global
The main advantage of trading using opposite Hamilton Canadian and Brompton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Canadian position performs unexpectedly, Brompton Global 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 Brompton Global will offset losses from the drop in Brompton Global's long position.| Hamilton Canadian vs. BMO Global High | Hamilton Canadian vs. BMO Covered Call | Hamilton Canadian vs. BMO Europe High | Hamilton Canadian vs. Forstrong Global Income |
| Brompton Global vs. NBI Active Canadian | Brompton Global vs. NBI Canadian Family | Brompton Global vs. NBI Liquid Alternatives | Brompton Global vs. NBI Sustainable Canadian |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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