Correlation Between Hamilton MidSmall and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hamilton MidSmall and Dow Jones 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 MidSmall and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hamilton MidSmall Cap Financials and Dow Jones Industrial, you can compare the effects of market volatilities on Hamilton MidSmall and Dow Jones 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 MidSmall with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton MidSmall and Dow Jones.
Diversification Opportunities for Hamilton MidSmall and Dow Jones
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hamilton and Dow is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton MidSmall Cap Financia and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Hamilton MidSmall 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 MidSmall Cap Financials are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Hamilton MidSmall i.e., Hamilton MidSmall and Dow Jones go up and down completely randomly.
Pair Corralation between Hamilton MidSmall and Dow Jones
Assuming the 90 days trading horizon Hamilton MidSmall Cap Financials is expected to generate 2.09 times more return on investment than Dow Jones. However, Hamilton MidSmall is 2.09 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 2,659 in Hamilton MidSmall Cap Financials on September 1, 2024 and sell it today you would earn a total of 1,229 from holding Hamilton MidSmall Cap Financials or generate 46.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hamilton MidSmall Cap Financia vs. Dow Jones Industrial
Performance |
| Timeline |
Hamilton MidSmall and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hamilton MidSmall Cap Financials
Pair trading matchups for Hamilton MidSmall
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hamilton MidSmall and Dow Jones
The main advantage of trading using opposite Hamilton MidSmall and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton MidSmall position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Hamilton MidSmall vs. CI Canadian Banks | Hamilton MidSmall vs. Condor Gold Plc | Hamilton MidSmall vs. BMO Mid Term IG | Hamilton MidSmall vs. Celestica |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stocks Directory Find actively traded stocks across global markets |