Correlation Between BetaPro SP and Hamilton Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro SP 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 BetaPro SP and Hamilton Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SP 500 and Hamilton Canadian Financials, you can compare the effects of market volatilities on BetaPro SP 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 BetaPro SP with a short position of Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and Hamilton Canadian.
Diversification Opportunities for BetaPro SP and Hamilton Canadian
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and Hamilton is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 and Hamilton Canadian Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian and BetaPro SP 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 BetaPro SP 500 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 BetaPro SP i.e., BetaPro SP and Hamilton Canadian go up and down completely randomly.
Pair Corralation between BetaPro SP and Hamilton Canadian
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the Hamilton Canadian. In addition to that, BetaPro SP is 1.35 times more volatile than Hamilton Canadian Financials. It trades about -0.08 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 1,269 in Hamilton Canadian Financials on September 3, 2024 and sell it today you would earn a total of 220.00 from holding Hamilton Canadian Financials or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SP 500 vs. Hamilton Canadian Financials
Performance |
| Timeline |
| BetaPro SP 500 |
| Hamilton Canadian |
BetaPro SP and Hamilton Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and Hamilton Canadian
The main advantage of trading using opposite BetaPro SP and Hamilton Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP 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.| BetaPro SP vs. BetaPro SP TSX | BetaPro SP vs. BetaPro SP TSX | BetaPro SP vs. BetaPro SPTSX Capped | BetaPro SP vs. BetaPro SPTSX 60 |
| Hamilton Canadian vs. Hamilton Enhanced Covered | Hamilton Canadian vs. Hamilton Enhanced Multi Sector | Hamilton Canadian vs. Harvest Diversified Monthly | Hamilton Canadian vs. Brompton Enhanced Multi Asset |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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