Correlation Between Global X and Hamilton Global

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

By analyzing existing cross correlation between Global X Natural and Hamilton Global Financials, you can compare the effects of market volatilities on Global X and Hamilton Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Hamilton Global.

Diversification Opportunities for Global X and Hamilton Global

0.43

Correlation Coefficient

Global X  Hamilton Global

Very weak diversification

The 3 months correlation between Global and Hamilton is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Global X Natural and Hamilton Global Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Global Fina 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 Natural are associated (or correlated) with Hamilton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Global Fina has no effect on the direction of Global X i.e., Global X and Hamilton Global go up and down completely randomly.

Pair Corralation between Global X and Hamilton Global

Assuming the 90 days trading horizon Global X Natural is expected to generate 2.32 times more return on investment than Hamilton Global. However, Global X is 2.32 times more volatile than Hamilton Global Financials. It trades about 0.14 of its potential returns per unit of risk. Hamilton Global Financials is currently generating about 0.12 per unit of risk. If you would invest  820.00  in Global X Natural on December 30, 2024 and sell it today you would earn a total of  135.00  from holding Global X Natural or generate 16.46% return on investment over 90 days.

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

Global X Natural  vs.  Hamilton Global Financials

Global X Natural

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Natural are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Global X displayed solid returns over the last few months and may actually be approaching a breakup point.

Hamilton Global Fina

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Global Financials are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Hamilton Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Global X and Hamilton Global

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

The idea behind Global X Natural and Hamilton Global Financials 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.