Correlation Between Hamilton Canadian and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both Hamilton Canadian and IShares SPTSX 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 IShares SPTSX 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 iShares SPTSX Capped, you can compare the effects of market volatilities on Hamilton Canadian and IShares SPTSX 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 IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Canadian and IShares SPTSX.
Diversification Opportunities for Hamilton Canadian and IShares SPTSX
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hamilton and IShares is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Canadian Bank and iShares SPTSX Capped in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Capped 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 IShares SPTSX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SPTSX Capped has no effect on the direction of Hamilton Canadian i.e., Hamilton Canadian and IShares SPTSX go up and down completely randomly.
Pair Corralation between Hamilton Canadian and IShares SPTSX
Assuming the 90 days trading horizon Hamilton Canadian Bank is expected to generate 0.3 times more return on investment than IShares SPTSX. However, Hamilton Canadian Bank is 3.35 times less risky than IShares SPTSX. It trades about 0.42 of its potential returns per unit of risk. iShares SPTSX Capped is currently generating about 0.02 per unit of risk. If you would invest 2,345 in Hamilton Canadian Bank on September 13, 2024 and sell it today you would earn a total of 83.00 from holding Hamilton Canadian Bank or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Canadian Bank vs. iShares SPTSX Capped
Performance |
| Timeline |
| Hamilton Canadian Bank |
| iShares SPTSX Capped |
Hamilton Canadian and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Canadian and IShares SPTSX
The main advantage of trading using opposite Hamilton Canadian and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Canadian position performs unexpectedly, IShares SPTSX 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 IShares SPTSX will offset losses from the drop in IShares SPTSX's long position.| Hamilton Canadian vs. Hamilton Enhanced Canadian | Hamilton Canadian vs. Hamilton Enhanced Canadian | Hamilton Canadian vs. Hamilton Australian Bank | Hamilton Canadian vs. Hamilton Global Financials |
| IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Global | IShares SPTSX vs. iShares SPTSX 60 | IShares SPTSX vs. iShares SPTSX Capped |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |