Correlation Between Hamilton Enhanced and Accelerate Absolute

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

Diversification Opportunities for Hamilton Enhanced and Accelerate Absolute

0.57

Correlation Coefficient

Hamilton Enhanced  Accelerate Absolute

Very weak diversification

The 3 months correlation between Hamilton and Accelerate is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Enhanced Covered and Accelerate Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Absolute 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 Accelerate Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Absolute has no effect on the direction of Hamilton Enhanced i.e., Hamilton Enhanced and Accelerate Absolute go up and down completely randomly.

Pair Corralation between Hamilton Enhanced and Accelerate Absolute

Assuming the 90 days trading horizon Hamilton Enhanced Covered is expected to under-perform the Accelerate Absolute. But the etf apears to be less risky and, when comparing its historical volatility, Hamilton Enhanced Covered is 1.1 times less risky than Accelerate Absolute. The etf trades about -0.26 of its potential returns per unit of risk. The Accelerate Absolute Return is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  2,770  in Accelerate Absolute Return on December 5, 2024 and sell it today you would lose (101.00) from holding Accelerate Absolute Return or give up 3.65% of portfolio value over 90 days.

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

Hamilton Enhanced Covered  vs.  Accelerate Absolute Return

Hamilton Enhanced Covered

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hamilton Enhanced Covered has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Hamilton Enhanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Accelerate Absolute

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accelerate Absolute Return has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Accelerate Absolute 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 Accelerate Absolute

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

The idea behind Hamilton Enhanced Covered and Accelerate Absolute Return 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.