Correlation Between Global X and Hamilton Energy

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

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

Diversification Opportunities for Global X and Hamilton Energy

0.84

Correlation Coefficient

Global X  Hamilton Energy

Very poor diversification

The 3 months correlation between Global and Hamilton is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Global X SPTSX and Hamilton Energy YIELD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Energy YIELD 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 SPTSX are associated (or correlated) with Hamilton Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Energy YIELD has no effect on the direction of Global X i.e., Global X and Hamilton Energy go up and down completely randomly.

Pair Corralation between Global X and Hamilton Energy

Assuming the 90 days trading horizon Global X is expected to generate 1.41 times less return on investment than Hamilton Energy. In addition to that, Global X is 1.34 times more volatile than Hamilton Energy YIELD. It trades about 0.02 of its total potential returns per unit of risk. Hamilton Energy YIELD is currently generating about 0.04 per unit of volatility. If you would invest  1,433  in Hamilton Energy YIELD on October 27, 2024 and sell it today you would earn a total of  119.00  from holding Hamilton Energy YIELD or generate 8.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	78.96%
Values	Daily Returns

Global X SPTSX  vs.  Hamilton Energy YIELD

Global X SPTSX

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X SPTSX are ranked lower than 1 (%) 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 Energy YIELD

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Energy YIELD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Hamilton Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Global X and Hamilton Energy

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

The idea behind Global X SPTSX and Hamilton Energy YIELD 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.