Correlation Between Hamilton Insurance and Coliseum Acquisition

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

Diversification Opportunities for Hamilton Insurance and Coliseum Acquisition

-0.17

Correlation Coefficient

Hamilton Insurance  Coliseum Acquisition

Good diversification

The 3 months correlation between Hamilton and Coliseum is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Insurance Group, and Coliseum Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coliseum Acquisition Corp 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 Coliseum Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coliseum Acquisition Corp has no effect on the direction of Hamilton Insurance i.e., Hamilton Insurance and Coliseum Acquisition go up and down completely randomly.

Pair Corralation between Hamilton Insurance and Coliseum Acquisition

Allowing for the 90-day total investment horizon Hamilton Insurance Group, is expected to generate 5.67 times more return on investment than Coliseum Acquisition. However, Hamilton Insurance is 5.67 times more volatile than Coliseum Acquisition Corp. It trades about 0.06 of its potential returns per unit of risk. Coliseum Acquisition Corp is currently generating about -0.03 per unit of risk. If you would invest  1,786  in Hamilton Insurance Group, on September 13, 2024 and sell it today you would earn a total of  134.00  from holding Hamilton Insurance Group, or generate 7.5% return on investment over 90 days.

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

Hamilton Insurance Group,  vs.  Coliseum Acquisition Corp

Hamilton Insurance Group,

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Hamilton Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Coliseum Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coliseum Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Coliseum Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hamilton Insurance and Coliseum Acquisition

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

The idea behind Hamilton Insurance Group, and Coliseum Acquisition Corp 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.