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 Active and Hamilton Enhanced Covered, 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

-0.19

Correlation Coefficient

Global X  Hamilton Enhanced

Good diversification

The 3 months correlation between Global and Hamilton is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active 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 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 Active 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 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 4.15 times less return on investment than Hamilton Enhanced. But when comparing it to its historical volatility, Global X Active is 2.29 times less risky than Hamilton Enhanced. It trades about 0.1 of its potential returns per unit of risk. Hamilton Enhanced Covered is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,297  in Hamilton Enhanced Covered on September 3, 2024 and sell it today you would earn a total of  133.00  from holding Hamilton Enhanced Covered or generate 10.25% return on investment over 90 days.

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

Global X Active  vs.  Hamilton Enhanced Covered

Global X Active

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Active are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and 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 Covered

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Enhanced Covered are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hamilton Enhanced may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 Active 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.