Correlation Between IShares SPTSX and Hamilton Canadian
Can any of the company-specific risk be diversified away by investing in both IShares 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 IShares 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 iShares SPTSX Capped and Hamilton Canadian Financials, you can compare the effects of market volatilities on IShares 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 IShares SPTSX with a short position of Hamilton Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Hamilton Canadian.
Diversification Opportunities for IShares SPTSX and Hamilton Canadian
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Hamilton is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Hamilton Canadian Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Canadian and IShares 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 iShares SPTSX Capped 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 IShares SPTSX i.e., IShares SPTSX and Hamilton Canadian go up and down completely randomly.
Pair Corralation between IShares SPTSX and Hamilton Canadian
Assuming the 90 days trading horizon iShares SPTSX Capped is expected to under-perform the Hamilton Canadian. In addition to that, IShares SPTSX is 2.01 times more volatile than Hamilton Canadian Financials. It trades about -0.22 of its total potential returns per unit of risk. Hamilton Canadian Financials is currently generating about 0.02 per unit of volatility. If you would invest 1,454 in Hamilton Canadian Financials on September 19, 2024 and sell it today you would earn a total of 3.00 from holding Hamilton Canadian Financials or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SPTSX Capped vs. Hamilton Canadian Financials
Performance |
| Timeline |
| iShares SPTSX Capped |
| Hamilton Canadian |
IShares SPTSX and Hamilton Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and Hamilton Canadian
The main advantage of trading using opposite IShares SPTSX and Hamilton Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares 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.| IShares SPTSX vs. iShares Global Infrastructure | IShares SPTSX vs. iShares Global Monthly | IShares SPTSX vs. iShares 1 5 Year | IShares SPTSX vs. iShares Equal Weight |
| Hamilton Canadian vs. iShares SPTSX Capped | Hamilton Canadian vs. iShares SPTSX Capped | Hamilton Canadian vs. iShares SPTSX Global | Hamilton Canadian vs. iShares SPTSX Capped |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |