Correlation Between IShares Core and Hamilton Energy
Can any of the company-specific risk be diversified away by investing in both IShares Core and Hamilton Energy 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 Core and Hamilton Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and Hamilton Energy Yield, you can compare the effects of market volatilities on IShares Core and Hamilton Energy 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 Core with a short position of Hamilton Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Hamilton Energy.
Diversification Opportunities for IShares Core and Hamilton Energy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Hamilton is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Hamilton Energy Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Energy Yield and IShares Core 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 Core SP are associated (or correlated) with Hamilton Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Energy Yield has no effect on the direction of IShares Core i.e., IShares Core and Hamilton Energy go up and down completely randomly.
Pair Corralation between IShares Core and Hamilton Energy
Assuming the 90 days trading horizon iShares Core SP is expected to generate 0.73 times more return on investment than Hamilton Energy. However, iShares Core SP is 1.37 times less risky than Hamilton Energy. It trades about 0.12 of its potential returns per unit of risk. Hamilton Energy Yield is currently generating about 0.06 per unit of risk. If you would invest 4,051 in iShares Core SP on August 31, 2024 and sell it today you would earn a total of 2,240 from holding iShares Core SP or generate 55.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 42.98% |
| Values | Daily Returns |
iShares Core SP vs. Hamilton Energy Yield
Performance |
| Timeline |
| iShares Core SP |
| Hamilton Energy Yield |
IShares Core and Hamilton Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Hamilton Energy
The main advantage of trading using opposite IShares Core and Hamilton Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Hamilton Energy 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 Energy will offset losses from the drop in Hamilton Energy's long position.| IShares Core vs. BMO SP 500 | IShares Core vs. Vanguard SP 500 | IShares Core vs. Global X SP | IShares Core vs. iShares Core SP |
| Hamilton Energy vs. Hamilton Equity Yield | Hamilton Energy vs. Hamilton Enhanced Canadian | Hamilton Energy vs. Hamilton Australian Bank | Hamilton Energy vs. Hamilton MidSmall Cap 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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