Correlation Between BetaPro SPTSX and Hamilton Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and Hamilton Canadian 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 SPTSX and Hamilton Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SPTSX 60 and Hamilton Canadian Bank, you can compare the effects of market volatilities on BetaPro SPTSX and Hamilton Canadian 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 SPTSX with a short position of Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Hamilton Canadian.
Diversification Opportunities for BetaPro SPTSX and Hamilton Canadian
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and Hamilton is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and Hamilton Canadian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian Bank and BetaPro SPTSX 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 SPTSX 60 are associated (or correlated) with Hamilton Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Canadian Bank has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Hamilton Canadian go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and Hamilton Canadian
Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to generate 22.32 times more return on investment than Hamilton Canadian. However, BetaPro SPTSX is 22.32 times more volatile than Hamilton Canadian Bank. It trades about 0.03 of its potential returns per unit of risk. Hamilton Canadian Bank is currently generating about 0.07 per unit of risk. If you would invest 3,423 in BetaPro SPTSX 60 on September 3, 2024 and sell it today you would lose (1,210) from holding BetaPro SPTSX 60 or give up 35.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SPTSX 60 vs. Hamilton Canadian Bank
Performance |
| Timeline |
| BetaPro SPTSX 60 |
| Hamilton Canadian Bank |
BetaPro SPTSX and Hamilton Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SPTSX and Hamilton Canadian
The main advantage of trading using opposite BetaPro SPTSX and Hamilton Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX position performs unexpectedly, Hamilton Canadian 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 Canadian will offset losses from the drop in Hamilton Canadian's long position.| BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SPTSX Capped | BetaPro SPTSX vs. BetaPro Gold Bullion |
| Hamilton Canadian vs. Hamilton Enhanced Canadian | Hamilton Canadian vs. Hamilton Enhanced Canadian | Hamilton Canadian vs. Hamilton Australian Bank | Hamilton Canadian vs. Hamilton Global 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |