Correlation Between Hamilton Enhanced and IShares SPTSX
Can any of the company-specific risk be diversified away by investing in both Hamilton Enhanced 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 Enhanced 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 Enhanced Canadian and iShares SPTSX Completion, you can compare the effects of market volatilities on Hamilton Enhanced 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 Enhanced with a short position of IShares SPTSX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Enhanced and IShares SPTSX.
Diversification Opportunities for Hamilton Enhanced and IShares SPTSX
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hamilton and IShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Enhanced Canadian and iShares SPTSX Completion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SPTSX Completion and Hamilton Enhanced 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 Enhanced Canadian 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 Completion has no effect on the direction of Hamilton Enhanced i.e., Hamilton Enhanced and IShares SPTSX go up and down completely randomly.
Pair Corralation between Hamilton Enhanced and IShares SPTSX
Assuming the 90 days trading horizon Hamilton Enhanced Canadian is expected to generate 0.85 times more return on investment than IShares SPTSX. However, Hamilton Enhanced Canadian is 1.18 times less risky than IShares SPTSX. It trades about 0.26 of its potential returns per unit of risk. iShares SPTSX Completion is currently generating about 0.14 per unit of risk. If you would invest 2,024 in Hamilton Enhanced Canadian on September 1, 2024 and sell it today you would earn a total of 517.00 from holding Hamilton Enhanced Canadian or generate 25.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Enhanced Canadian vs. iShares SPTSX Completion
Performance |
| Timeline |
| Hamilton Enhanced |
| iShares SPTSX Completion |
Hamilton Enhanced and IShares SPTSX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Enhanced and IShares SPTSX
The main advantage of trading using opposite Hamilton Enhanced and IShares SPTSX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Enhanced 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 Enhanced vs. Hamilton Enhanced Multi Sector | Hamilton Enhanced vs. Hamilton Enhanced Covered | Hamilton Enhanced vs. Hamilton Canadian Financials | Hamilton Enhanced vs. Harvest Diversified Monthly |
| IShares SPTSX vs. iShares MSCI EAFE | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Small | IShares SPTSX vs. iShares Canadian Real |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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