Correlation Between Hamilton Enhanced and Global X

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

By analyzing existing cross correlation between Hamilton Enhanced Covered and Global X Balanced, you can compare the effects of market volatilities on Hamilton Enhanced and Global X 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 Enhanced with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Enhanced and Global X.

Diversification Opportunities for Hamilton Enhanced and Global X

0.94

Correlation Coefficient

Hamilton Enhanced  Global X

Almost no diversification

The 3 months correlation between Hamilton and Global is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Enhanced Covered and Global X Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Balanced and Hamilton Enhanced 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 Enhanced Covered are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Balanced has no effect on the direction of Hamilton Enhanced i.e., Hamilton Enhanced and Global X go up and down completely randomly.

Pair Corralation between Hamilton Enhanced and Global X

Assuming the 90 days trading horizon Hamilton Enhanced is expected to generate 1.08 times less return on investment than Global X. In addition to that, Hamilton Enhanced is 2.1 times more volatile than Global X Balanced. It trades about 0.12 of its total potential returns per unit of risk. Global X Balanced is currently generating about 0.27 per unit of volatility. If you would invest  1,567  in Global X Balanced on September 15, 2024 and sell it today you would earn a total of  31.00  from holding Global X Balanced or generate 1.98% return on investment over 90 days.

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

Hamilton Enhanced Covered  vs.  Global X Balanced

Hamilton Enhanced Covered

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Enhanced Covered are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hamilton Enhanced may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global X Balanced

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Balanced are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Global X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hamilton Enhanced and Global X

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

The idea behind Hamilton Enhanced Covered and Global X Balanced 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.