Correlation Between Hamilton MidSmall and Hamilton Global
Can any of the company-specific risk be diversified away by investing in both Hamilton MidSmall and Hamilton Global 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 Hamilton Global 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 Hamilton Global Financials, you can compare the effects of market volatilities on Hamilton MidSmall and Hamilton Global 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 Hamilton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton MidSmall and Hamilton Global.
Diversification Opportunities for Hamilton MidSmall and Hamilton Global
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hamilton and Hamilton is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton MidSmall Cap Financia and Hamilton Global Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Global Fina 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 Hamilton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Global Fina has no effect on the direction of Hamilton MidSmall i.e., Hamilton MidSmall and Hamilton Global go up and down completely randomly.
Pair Corralation between Hamilton MidSmall and Hamilton Global
Assuming the 90 days trading horizon Hamilton MidSmall Cap Financials is expected to under-perform the Hamilton Global. In addition to that, Hamilton MidSmall is 1.58 times more volatile than Hamilton Global Financials. It trades about -0.03 of its total potential returns per unit of risk. Hamilton Global Financials is currently generating about 0.26 per unit of volatility. If you would invest 2,714 in Hamilton Global Financials on September 14, 2024 and sell it today you would earn a total of 85.00 from holding Hamilton Global Financials or generate 3.13% 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. Hamilton Global Financials
Performance |
| Timeline |
| Hamilton MidSmall Cap |
| Hamilton Global Fina |
Hamilton MidSmall and Hamilton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hamilton MidSmall and Hamilton Global
The main advantage of trading using opposite Hamilton MidSmall and Hamilton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton MidSmall position performs unexpectedly, Hamilton Global 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 Global will offset losses from the drop in Hamilton Global's long position.| Hamilton MidSmall vs. iShares SPTSX Capped | Hamilton MidSmall vs. iShares SPTSX Capped | Hamilton MidSmall vs. iShares SPTSX Global | Hamilton MidSmall vs. iShares SPTSX Capped |
| Hamilton Global vs. Hamilton Canadian Bank | Hamilton Global vs. Hamilton Australian Bank | Hamilton Global vs. Hamilton Enhanced Canadian | Hamilton Global vs. Hamilton MidSmall Cap Financials |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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