Correlation Between Hamilton Global and Harvest Brand
Can any of the company-specific risk be diversified away by investing in both Hamilton Global and Harvest Brand 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 Global and Harvest Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Global Financials and Harvest Brand Leaders, you can compare the effects of market volatilities on Hamilton Global and Harvest Brand 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 Global with a short position of Harvest Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Global and Harvest Brand.
Diversification Opportunities for Hamilton Global and Harvest Brand
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hamilton and Harvest is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Global Financials and Harvest Brand Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Brand Leaders and Hamilton Global 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 Global Financials are associated (or correlated) with Harvest Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Brand Leaders has no effect on the direction of Hamilton Global i.e., Hamilton Global and Harvest Brand go up and down completely randomly.
Pair Corralation between Hamilton Global and Harvest Brand
Assuming the 90 days trading horizon Hamilton Global Financials is expected to generate 1.2 times more return on investment than Harvest Brand. However, Hamilton Global is 1.2 times more volatile than Harvest Brand Leaders. It trades about 0.24 of its potential returns per unit of risk. Harvest Brand Leaders is currently generating about 0.09 per unit of risk. If you would invest 2,736 in Hamilton Global Financials on October 24, 2024 and sell it today you would earn a total of 117.00 from holding Hamilton Global Financials or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hamilton Global Financials vs. Harvest Brand Leaders
Performance |
| Timeline |
| Hamilton Global Fina |
| Harvest Brand Leaders |
Hamilton Global and Harvest Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Global and Harvest Brand
The main advantage of trading using opposite Hamilton Global and Harvest Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Global position performs unexpectedly, Harvest Brand 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 Harvest Brand will offset losses from the drop in Harvest Brand's long position.| Hamilton Global vs. Hamilton Canadian Bank | Hamilton Global vs. Hamilton Australian Bank | Hamilton Global vs. Hamilton Enhanced Canadian |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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