Correlation Between 3iQ CoinShares and Hamilton Enhanced

Can any of the company-specific risk be diversified away by investing in both 3iQ CoinShares 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 3iQ CoinShares and Hamilton Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3iQ CoinShares Ether and Hamilton Enhanced Covered, you can compare the effects of market volatilities on 3iQ CoinShares 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 3iQ CoinShares with a short position of Hamilton Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ CoinShares and Hamilton Enhanced.

Diversification Opportunities for 3iQ CoinShares and Hamilton Enhanced

0.64

Correlation Coefficient

3iQ CoinShares  Hamilton Enhanced

Poor diversification

The 3 months correlation between 3iQ and Hamilton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ CoinShares Ether and Hamilton Enhanced Covered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Enhanced Covered and 3iQ CoinShares 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 3iQ CoinShares Ether 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 Covered has no effect on the direction of 3iQ CoinShares i.e., 3iQ CoinShares and Hamilton Enhanced go up and down completely randomly.

Pair Corralation between 3iQ CoinShares and Hamilton Enhanced

Assuming the 90 days trading horizon 3iQ CoinShares Ether is expected to under-perform the Hamilton Enhanced. In addition to that, 3iQ CoinShares is 3.71 times more volatile than Hamilton Enhanced Covered. It trades about -0.16 of its total potential returns per unit of risk. Hamilton Enhanced Covered is currently generating about -0.07 per unit of volatility. If you would invest  1,371  in Hamilton Enhanced Covered on December 27, 2024 and sell it today you would lose (75.00) from holding Hamilton Enhanced Covered or give up 5.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

3iQ CoinShares Ether  vs.  Hamilton Enhanced Covered

3iQ CoinShares Ether

Risk-Adjusted Performance

Very Weak

Over the last 90 days 3iQ CoinShares Ether has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Hamilton Enhanced Covered

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hamilton Enhanced Covered has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Hamilton Enhanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with 3iQ CoinShares and Hamilton Enhanced

The main advantage of trading using opposite 3iQ CoinShares and Hamilton Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3iQ CoinShares 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.

The idea behind 3iQ CoinShares Ether and Hamilton Enhanced Covered 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.