Correlation Between BetaPro SPTSX and Hamilton Enhanced
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and Hamilton Enhanced 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 Enhanced 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 Enhanced Utilities, you can compare the effects of market volatilities on BetaPro SPTSX and Hamilton Enhanced 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 Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and Hamilton Enhanced.
Diversification Opportunities for BetaPro SPTSX and Hamilton Enhanced
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and Hamilton is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and Hamilton Enhanced Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Enhanced 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 Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Enhanced has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and Hamilton Enhanced go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and Hamilton Enhanced
Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the Hamilton Enhanced. In addition to that, BetaPro SPTSX is 1.58 times more volatile than Hamilton Enhanced Utilities. It trades about -0.12 of its total potential returns per unit of risk. Hamilton Enhanced Utilities is currently generating about 0.15 per unit of volatility. If you would invest 1,091 in Hamilton Enhanced Utilities on September 3, 2024 and sell it today you would earn a total of 234.00 from holding Hamilton Enhanced Utilities or generate 21.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SPTSX 60 vs. Hamilton Enhanced Utilities
Performance |
| Timeline |
| BetaPro SPTSX 60 |
| Hamilton Enhanced |
BetaPro SPTSX and Hamilton Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SPTSX and Hamilton Enhanced
The main advantage of trading using opposite BetaPro SPTSX and Hamilton Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX position performs unexpectedly, Hamilton Enhanced 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 Enhanced will offset losses from the drop in Hamilton Enhanced'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 Enhanced vs. Hamilton Enhanced Canadian | Hamilton Enhanced vs. Hamilton Enhanced Canadian | Hamilton Enhanced vs. Hamilton Canadian Financials | Hamilton Enhanced 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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