Correlation Between Real Estate and Hamilton Enhanced

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

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

Diversification Opportunities for Real Estate and Hamilton Enhanced

0.39

Correlation Coefficient

Real Estate  Hamilton Enhanced

Weak diversification

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

Pair Corralation between Real Estate and Hamilton Enhanced

Assuming the 90 days horizon Real Estate E Commerce is expected to under-perform the Hamilton Enhanced. In addition to that, Real Estate is 1.16 times more volatile than Hamilton Enhanced Covered. It trades about -0.19 of its total potential returns per unit of risk. Hamilton Enhanced Covered is currently generating about -0.08 per unit of volatility. 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

Real Estate E Commerce  vs.  Hamilton Enhanced Covered

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.

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.

Pair Trading with Real Estate and Hamilton Enhanced

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

The idea behind Real Estate E Commerce and Hamilton Enhanced Covered 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.