Correlation Between Eastern and Hamilton Insurance

Can any of the company-specific risk be diversified away by investing in both Eastern and Hamilton Insurance 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 Eastern and Hamilton Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastern Co and Hamilton Insurance Group,, you can compare the effects of market volatilities on Eastern and Hamilton Insurance 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 Eastern with a short position of Hamilton Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Hamilton Insurance.

Diversification Opportunities for Eastern and Hamilton Insurance

-0.27

Correlation Coefficient

Eastern  Hamilton Insurance

Very good diversification

The 3 months correlation between Eastern and Hamilton is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, and Eastern 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 Eastern Co are associated (or correlated) with Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Eastern i.e., Eastern and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Eastern and Hamilton Insurance

Considering the 90-day investment horizon Eastern is expected to generate 1.18 times less return on investment than Hamilton Insurance. In addition to that, Eastern is 1.42 times more volatile than Hamilton Insurance Group,. It trades about 0.03 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.05 per unit of volatility. If you would invest  1,500  in Hamilton Insurance Group, on October 7, 2024 and sell it today you would earn a total of  353.00  from holding Hamilton Insurance Group, or generate 23.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.47%
Values	Daily Returns

Eastern Co  vs.  Hamilton Insurance Group,

Eastern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Hamilton Insurance Group,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hamilton Insurance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eastern and Hamilton Insurance

The main advantage of trading using opposite Eastern and Hamilton Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern position performs unexpectedly, Hamilton Insurance 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 Insurance will offset losses from the drop in Hamilton Insurance's long position.

The idea behind Eastern Co and Hamilton Insurance Group, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.