Correlation Between Hamilton Enhanced and Real Estate

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

Diversification Opportunities for Hamilton Enhanced and Real Estate

0.39

Correlation Coefficient

Hamilton Enhanced  Real Estate

Weak diversification

The 3 months correlation between Hamilton and Real is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Enhanced Covered and Real Estate E Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate E 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate E has no effect on the direction of Hamilton Enhanced i.e., Hamilton Enhanced and Real Estate go up and down completely randomly.

Pair Corralation between Hamilton Enhanced and Real Estate

Assuming the 90 days trading horizon Hamilton Enhanced Covered is expected to generate 0.86 times more return on investment than Real Estate. However, Hamilton Enhanced Covered is 1.16 times less risky than Real Estate. It trades about -0.08 of its potential returns per unit of risk. Real Estate E Commerce is currently generating about -0.19 per unit of risk. If you would invest  1,351  in Hamilton Enhanced Covered on December 29, 2024 and sell it today you would lose (84.00) from holding Hamilton Enhanced Covered or give up 6.22% of portfolio value over 90 days.

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

Hamilton Enhanced Covered  vs.  Real Estate E Commerce

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.

Real Estate E

Risk-Adjusted Performance

Very Weak

Over the last 90 days Real Estate E Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Hamilton Enhanced and Real Estate

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

The idea behind Hamilton Enhanced Covered and Real Estate E Commerce 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.