Correlation Between Global Healthcare and Hamilton MidSmall
Can any of the company-specific risk be diversified away by investing in both Global Healthcare and Hamilton MidSmall 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 MidSmall 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 MidSmall Cap Financials, you can compare the effects of market volatilities on Global Healthcare and Hamilton MidSmall 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 MidSmall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Healthcare and Hamilton MidSmall.
Diversification Opportunities for Global Healthcare and Hamilton MidSmall
-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 MidSmall Cap Financia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton MidSmall Cap 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 MidSmall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton MidSmall Cap has no effect on the direction of Global Healthcare i.e., Global Healthcare and Hamilton MidSmall go up and down completely randomly.
Pair Corralation between Global Healthcare and Hamilton MidSmall
Assuming the 90 days trading horizon Global Healthcare Income is expected to under-perform the Hamilton MidSmall. But the fund apears to be less risky and, when comparing its historical volatility, Global Healthcare Income is 2.47 times less risky than Hamilton MidSmall. The fund trades about -0.01 of its potential returns per unit of risk. The Hamilton MidSmall Cap Financials is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,411 in Hamilton MidSmall Cap Financials on September 2, 2024 and sell it today you would earn a total of 474.00 from holding Hamilton MidSmall Cap Financials or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global Healthcare Income vs. Hamilton MidSmall Cap Financia
Performance |
| Timeline |
| Global Healthcare Income |
| Hamilton MidSmall Cap |
Global Healthcare and Hamilton MidSmall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Healthcare and Hamilton MidSmall
The main advantage of trading using opposite Global Healthcare and Hamilton MidSmall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Healthcare position performs unexpectedly, Hamilton MidSmall 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 MidSmall will offset losses from the drop in Hamilton MidSmall's long position.| Global Healthcare vs. Tech Leaders Income | Global Healthcare vs. Brompton Global Dividend | Global Healthcare vs. Forstrong Global Income | Global Healthcare vs. iShares Canadian HYBrid |
| Hamilton MidSmall vs. Brompton Global Dividend | Hamilton MidSmall vs. Global Healthcare Income | Hamilton MidSmall vs. Tech Leaders Income | Hamilton MidSmall vs. Brompton North American |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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