Correlation Between CI WisdomTree and Hamilton Enhanced
Can any of the company-specific risk be diversified away by investing in both CI WisdomTree 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 CI WisdomTree and Hamilton Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI WisdomTree Japan and Hamilton Enhanced Utilities, you can compare the effects of market volatilities on CI WisdomTree 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 CI WisdomTree with a short position of Hamilton Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI WisdomTree and Hamilton Enhanced.
Diversification Opportunities for CI WisdomTree and Hamilton Enhanced
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JAPN and Hamilton is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CI WisdomTree Japan and Hamilton Enhanced Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Enhanced and CI WisdomTree 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 CI WisdomTree Japan 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 CI WisdomTree i.e., CI WisdomTree and Hamilton Enhanced go up and down completely randomly.
Pair Corralation between CI WisdomTree and Hamilton Enhanced
Assuming the 90 days trading horizon CI WisdomTree Japan is expected to generate 1.45 times more return on investment than Hamilton Enhanced. However, CI WisdomTree is 1.45 times more volatile than Hamilton Enhanced Utilities. It trades about 0.06 of its potential returns per unit of risk. Hamilton Enhanced Utilities is currently generating about -0.01 per unit of risk. If you would invest 4,692 in CI WisdomTree Japan on November 2, 2024 and sell it today you would earn a total of 354.00 from holding CI WisdomTree Japan or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.05% |
| Values | Daily Returns |
CI WisdomTree Japan vs. Hamilton Enhanced Utilities
Performance |
| Timeline |
| CI WisdomTree Japan |
| Hamilton Enhanced |
CI WisdomTree and Hamilton Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI WisdomTree and Hamilton Enhanced
The main advantage of trading using opposite CI WisdomTree and Hamilton Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI WisdomTree 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.| CI WisdomTree vs. NBI High Yield | CI WisdomTree vs. NBI Unconstrained Fixed | CI WisdomTree vs. Mackenzie Developed ex North | CI WisdomTree vs. BMO Short Term Bond |
| Hamilton Enhanced vs. Hamilton Enhanced Multi Sector | Hamilton Enhanced vs. Hamilton Enhanced Covered | Hamilton Enhanced vs. Hamilton Canadian Financials | Hamilton Enhanced vs. Harvest Diversified Monthly |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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