Correlation Between Hamilton Insurance and Globe Life

Can any of the company-specific risk be diversified away by investing in both Hamilton Insurance and Globe Life 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 Globe Life 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 Globe Life, you can compare the effects of market volatilities on Hamilton Insurance and Globe Life 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 Globe Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Insurance and Globe Life.

Diversification Opportunities for Hamilton Insurance and Globe Life

0.37

Correlation Coefficient

Hamilton Insurance  Globe Life

Weak diversification

The 3 months correlation between Hamilton and Globe is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Insurance Group, and Globe Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Life 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 Globe Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Life has no effect on the direction of Hamilton Insurance i.e., Hamilton Insurance and Globe Life go up and down completely randomly.

Pair Corralation between Hamilton Insurance and Globe Life

Allowing for the 90-day total investment horizon Hamilton Insurance is expected to generate 1.69 times less return on investment than Globe Life. In addition to that, Hamilton Insurance is 1.17 times more volatile than Globe Life. It trades about 0.09 of its total potential returns per unit of risk. Globe Life is currently generating about 0.17 per unit of volatility. If you would invest  10,525  in Globe Life on October 26, 2024 and sell it today you would earn a total of  1,528  from holding Globe Life or generate 14.52% return on investment over 90 days.

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

Hamilton Insurance Group,  vs.  Globe Life

Hamilton Insurance Group,

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Hamilton Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Globe Life

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Globe Life are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Globe Life disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hamilton Insurance and Globe Life

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

The idea behind Hamilton Insurance Group, and Globe Life 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.