Correlation Between Global X and Hamilton MidSmall
Can any of the company-specific risk be diversified away by investing in both Global X and Hamilton MidSmall 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 Global X and Hamilton MidSmall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Natural and Hamilton MidSmall Cap Financials, you can compare the effects of market volatilities on Global X and Hamilton MidSmall 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 Global X with a short position of Hamilton MidSmall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Hamilton MidSmall.
Diversification Opportunities for Global X and Hamilton MidSmall
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Hamilton is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global X Natural and Hamilton MidSmall Cap Financia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton MidSmall Cap and Global X 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 Global X Natural are associated (or correlated) with Hamilton MidSmall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton MidSmall Cap has no effect on the direction of Global X i.e., Global X and Hamilton MidSmall go up and down completely randomly.
Pair Corralation between Global X and Hamilton MidSmall
Assuming the 90 days trading horizon Global X Natural is expected to under-perform the Hamilton MidSmall. In addition to that, Global X is 1.38 times more volatile than Hamilton MidSmall Cap Financials. It trades about -0.02 of its total potential returns per unit of risk. Hamilton MidSmall Cap Financials is currently generating about 0.15 per unit of volatility. If you would invest 2,892 in Hamilton MidSmall Cap Financials on September 3, 2024 and sell it today you would earn a total of 1,007 from holding Hamilton MidSmall Cap Financials or generate 34.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Natural vs. Hamilton MidSmall Cap Financia
Performance |
| Timeline |
| Global X Natural |
| Hamilton MidSmall Cap |
Global X and Hamilton MidSmall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Hamilton MidSmall
The main advantage of trading using opposite Global X and Hamilton MidSmall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Hamilton MidSmall 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 MidSmall will offset losses from the drop in Hamilton MidSmall's long position.| Global X vs. Global X Crude | Global X vs. Global X Gold | Global X vs. Global X Active | Global X vs. Global X Active |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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