Correlation Between Tech Leaders and Hamilton Canadian
Can any of the company-specific risk be diversified away by investing in both Tech Leaders 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 Tech Leaders and Hamilton Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tech Leaders Income and Hamilton Canadian Financials, you can compare the effects of market volatilities on Tech Leaders 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 Tech Leaders with a short position of Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tech Leaders and Hamilton Canadian.
Diversification Opportunities for Tech Leaders and Hamilton Canadian
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tech and Hamilton is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tech Leaders Income and Hamilton Canadian Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian and Tech Leaders 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 Tech Leaders Income 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 has no effect on the direction of Tech Leaders i.e., Tech Leaders and Hamilton Canadian go up and down completely randomly.
Pair Corralation between Tech Leaders and Hamilton Canadian
Assuming the 90 days trading horizon Tech Leaders Income is expected to generate 2.29 times more return on investment than Hamilton Canadian. However, Tech Leaders is 2.29 times more volatile than Hamilton Canadian Financials. It trades about 0.09 of its potential returns per unit of risk. Hamilton Canadian Financials is currently generating about 0.17 per unit of risk. If you would invest 1,954 in Tech Leaders Income on August 29, 2024 and sell it today you would earn a total of 588.00 from holding Tech Leaders Income or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tech Leaders Income vs. Hamilton Canadian Financials
Performance |
| Timeline |
| Tech Leaders Income |
| Hamilton Canadian |
Tech Leaders and Hamilton Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tech Leaders and Hamilton Canadian
The main advantage of trading using opposite Tech Leaders and Hamilton Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tech Leaders 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.| Tech Leaders vs. Global Healthcare Income | Tech Leaders vs. Harvest Tech Achievers | Tech Leaders vs. Brompton Global Dividend | Tech Leaders vs. Harvest Brand Leaders |
| Hamilton Canadian vs. Hamilton Enhanced Covered | Hamilton Canadian vs. Hamilton Enhanced Multi Sector | Hamilton Canadian vs. Harvest Diversified Monthly | Hamilton Canadian vs. Brompton Enhanced Multi Asset |
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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