Correlation Between Global Healthcare and Hamilton Canadian
Can any of the company-specific risk be diversified away by investing in both Global Healthcare and Hamilton Canadian 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 Healthcare and Hamilton Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Healthcare Income and Hamilton Canadian Financials, you can compare the effects of market volatilities on Global Healthcare and Hamilton Canadian 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 Healthcare with a short position of Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Healthcare and Hamilton Canadian.
Diversification Opportunities for Global Healthcare and Hamilton Canadian
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Hamilton is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Global Healthcare Income and Hamilton Canadian Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian and Global Healthcare 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 Healthcare Income are associated (or correlated) with Hamilton Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Canadian has no effect on the direction of Global Healthcare i.e., Global Healthcare and Hamilton Canadian go up and down completely randomly.
Pair Corralation between Global Healthcare and Hamilton Canadian
Assuming the 90 days trading horizon Global Healthcare Income is expected to under-perform the Hamilton Canadian. In addition to that, Global Healthcare is 2.08 times more volatile than Hamilton Canadian Financials. It trades about -0.01 of its total potential returns per unit of risk. Hamilton Canadian Financials is currently generating about 0.17 per unit of volatility. If you would invest 1,246 in Hamilton Canadian Financials on August 25, 2024 and sell it today you would earn a total of 245.00 from holding Hamilton Canadian Financials or generate 19.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 88.36% |
| Values | Daily Returns |
Global Healthcare Income vs. Hamilton Canadian Financials
Performance |
| Timeline |
| Global Healthcare Income |
| Hamilton Canadian |
Global Healthcare and Hamilton Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Healthcare and Hamilton Canadian
The main advantage of trading using opposite Global Healthcare and Hamilton Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Healthcare position performs unexpectedly, Hamilton Canadian 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 Canadian will offset losses from the drop in Hamilton Canadian's long position.| Global Healthcare vs. Tech Leaders Income | Global Healthcare vs. BetaPro SPTSX 60 | Global Healthcare vs. Brompton Global Dividend | Global Healthcare vs. Global X Active |
| Hamilton Canadian vs. Brompton Global Dividend | Hamilton Canadian vs. Tech Leaders Income | Hamilton Canadian vs. Global Healthcare Income | Hamilton Canadian vs. Brompton European Dividend |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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