Correlation Between Hamilton Canadian and IShares ESG
Can any of the company-specific risk be diversified away by investing in both Hamilton Canadian and IShares ESG 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 Hamilton Canadian and IShares ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton Canadian Financials and iShares ESG Growth, you can compare the effects of market volatilities on Hamilton Canadian and IShares ESG 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 Hamilton Canadian with a short position of IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Canadian and IShares ESG.
Diversification Opportunities for Hamilton Canadian and IShares ESG
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hamilton and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Canadian Financials and iShares ESG Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG Growth and Hamilton Canadian 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 Hamilton Canadian Financials are associated (or correlated) with IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG Growth has no effect on the direction of Hamilton Canadian i.e., Hamilton Canadian and IShares ESG go up and down completely randomly.
Pair Corralation between Hamilton Canadian and IShares ESG
Assuming the 90 days trading horizon Hamilton Canadian is expected to generate 1.43 times less return on investment than IShares ESG. But when comparing it to its historical volatility, Hamilton Canadian Financials is 1.48 times less risky than IShares ESG. It trades about 0.3 of its potential returns per unit of risk. iShares ESG Growth is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,747 in iShares ESG Growth on September 19, 2024 and sell it today you would earn a total of 158.00 from holding iShares ESG Growth or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton Canadian Financials vs. iShares ESG Growth
Performance |
| Timeline |
| Hamilton Canadian |
| iShares ESG Growth |
Hamilton Canadian and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton Canadian and IShares ESG
The main advantage of trading using opposite Hamilton Canadian and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Canadian position performs unexpectedly, IShares ESG 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 IShares ESG will offset losses from the drop in IShares ESG's long position.| Hamilton Canadian vs. iShares SPTSX Capped | Hamilton Canadian vs. iShares SPTSX Capped | Hamilton Canadian vs. iShares SPTSX Global | Hamilton Canadian vs. iShares SPTSX Capped |
| IShares ESG vs. Harvest Diversified Monthly | IShares ESG vs. Hamilton Canadian Financials | IShares ESG vs. Hamilton Enhanced Covered | IShares ESG vs. Hamilton Enhanced Multi Sector |
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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