Correlation Between Global X and Hamilton Enhanced
Can any of the company-specific risk be diversified away by investing in both Global X and Hamilton Enhanced 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 Global X and Hamilton Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Active and Hamilton Enhanced Multi Sector, you can compare the effects of market volatilities on Global X and Hamilton Enhanced 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 Global X with a short position of Hamilton Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Hamilton Enhanced.
Diversification Opportunities for Global X and Hamilton Enhanced
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Hamilton is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Hamilton Enhanced Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Enhanced Multi and Global X 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 Global X Active are associated (or correlated) with Hamilton Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Enhanced Multi has no effect on the direction of Global X i.e., Global X and Hamilton Enhanced go up and down completely randomly.
Pair Corralation between Global X and Hamilton Enhanced
Assuming the 90 days trading horizon Global X is expected to generate 3.82 times less return on investment than Hamilton Enhanced. But when comparing it to its historical volatility, Global X Active is 9.2 times less risky than Hamilton Enhanced. It trades about 0.33 of its potential returns per unit of risk. Hamilton Enhanced Multi Sector is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,595 in Hamilton Enhanced Multi Sector on August 25, 2024 and sell it today you would earn a total of 225.00 from holding Hamilton Enhanced Multi Sector or generate 14.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Active vs. Hamilton Enhanced Multi Sector
Performance |
| Timeline |
| Global X Active |
| Hamilton Enhanced Multi |
Global X and Hamilton Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Hamilton Enhanced
The main advantage of trading using opposite Global X and Hamilton Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Hamilton Enhanced 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 Enhanced will offset losses from the drop in Hamilton Enhanced's long position.| Global X vs. Mackenzie Canadian Aggregate | Global X vs. Mackenzie Canadian Short | Global X vs. Mackenzie Core Plus | Global X vs. Mackenzie Investment Grade |
| Hamilton Enhanced vs. Global X Active | Hamilton Enhanced vs. Global X Active | Hamilton Enhanced vs. Global X Active | Hamilton Enhanced vs. Global X Active |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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