Correlation Between BetaPro SP and Hamilton Mid
Can any of the company-specific risk be diversified away by investing in both BetaPro SP and Hamilton Mid 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 Mid 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 Mid Cap Financials, you can compare the effects of market volatilities on BetaPro SP and Hamilton Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and Hamilton Mid.
Diversification Opportunities for BetaPro SP and Hamilton Mid
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and Hamilton is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 and Hamilton Mid Cap Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Mid Cap 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Mid Cap has no effect on the direction of BetaPro SP i.e., BetaPro SP and Hamilton Mid go up and down completely randomly.
Pair Corralation between BetaPro SP and Hamilton Mid
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the Hamilton Mid. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SP 500 is 2.27 times less risky than Hamilton Mid. The etf trades about -0.08 of its potential returns per unit of risk. The Hamilton Mid Cap Financials is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,032 in Hamilton Mid Cap Financials on December 1, 2024 and sell it today you would earn a total of 1,610 from holding Hamilton Mid Cap Financials or generate 79.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 62.02% |
| Values | Daily Returns |
BetaPro SP 500 vs. Hamilton Mid Cap Financials
Performance |
| Timeline |
| BetaPro SP 500 |
| Hamilton Mid Cap |
BetaPro SP and Hamilton Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and Hamilton Mid
The main advantage of trading using opposite BetaPro SP and Hamilton Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP position performs unexpectedly, Hamilton Mid 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 Mid will offset losses from the drop in Hamilton Mid's long position.| BetaPro SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro NASDAQ 100 2x | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro Gold Bullion |
| Hamilton Mid vs. CI Canadian Banks | Hamilton Mid vs. BMO Mid Term IG | Hamilton Mid vs. Celestica | Hamilton Mid vs. Descartes Systems Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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