Correlation Between Hamilton Insurance and Gladstone Investment

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

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

Diversification Opportunities for Hamilton Insurance and Gladstone Investment

0.49

Correlation Coefficient

Hamilton Insurance  Gladstone Investment

Very weak diversification

The 3 months correlation between Hamilton and Gladstone is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Insurance Group, and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Hamilton Insurance 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 Hamilton Insurance Group, are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Hamilton Insurance i.e., Hamilton Insurance and Gladstone Investment go up and down completely randomly.

Pair Corralation between Hamilton Insurance and Gladstone Investment

Allowing for the 90-day total investment horizon Hamilton Insurance Group, is expected to generate 4.77 times more return on investment than Gladstone Investment. However, Hamilton Insurance is 4.77 times more volatile than Gladstone Investment. It trades about 0.12 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.1 per unit of risk. If you would invest  1,890  in Hamilton Insurance Group, on December 30, 2024 and sell it today you would earn a total of  244.00  from holding Hamilton Insurance Group, or generate 12.91% return on investment over 90 days.

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

Hamilton Insurance Group,  vs.  Gladstone Investment

Hamilton Insurance Group,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Hamilton Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Gladstone Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Gladstone Investment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hamilton Insurance and Gladstone Investment

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

The idea behind Hamilton Insurance Group, and Gladstone Investment 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.