Correlation Between Global X and Hamilton Enhanced

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

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

Diversification Opportunities for Global X and Hamilton Enhanced

0.78

Correlation Coefficient

Global X  Hamilton Enhanced

Poor diversification

The 3 months correlation between Global and Hamilton is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Global X Seasonal and Hamilton Enhanced Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Enhanced and Global X 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 Global X Seasonal 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 has no effect on the direction of Global X i.e., Global X and Hamilton Enhanced go up and down completely randomly.

Pair Corralation between Global X and Hamilton Enhanced

Assuming the 90 days trading horizon Global X is expected to generate 3.8 times less return on investment than Hamilton Enhanced. But when comparing it to its historical volatility, Global X Seasonal is 1.06 times less risky than Hamilton Enhanced. It trades about 0.11 of its potential returns per unit of risk. Hamilton Enhanced Canadian is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  2,207  in Hamilton Enhanced Canadian on August 31, 2024 and sell it today you would earn a total of  334.00  from holding Hamilton Enhanced Canadian or generate 15.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Global X Seasonal  vs.  Hamilton Enhanced Canadian

Global X Seasonal

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Seasonal are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Global X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Hamilton Enhanced

Risk-Adjusted Performance

30 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Enhanced Canadian are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hamilton Enhanced displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and Hamilton Enhanced

The main advantage of trading using opposite Global X and Hamilton Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Seasonal and Hamilton Enhanced Canadian 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.