Correlation Between BetaPro NASDAQ and Hamilton Enhanced

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

By analyzing existing cross correlation between BetaPro NASDAQ 100 2x and Hamilton Enhanced Canadian, you can compare the effects of market volatilities on BetaPro NASDAQ 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 BetaPro NASDAQ with a short position of Hamilton Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and Hamilton Enhanced.

Diversification Opportunities for BetaPro NASDAQ and Hamilton Enhanced

-0.91

Correlation Coefficient

BetaPro NASDAQ  Hamilton Enhanced

Pay attention - limited upside

The 3 months correlation between BetaPro and Hamilton is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and Hamilton Enhanced Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Enhanced and BetaPro NASDAQ 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 BetaPro NASDAQ 100 2x 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 has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and Hamilton Enhanced go up and down completely randomly.

Pair Corralation between BetaPro NASDAQ and Hamilton Enhanced

Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the Hamilton Enhanced. In addition to that, BetaPro NASDAQ is 3.47 times more volatile than Hamilton Enhanced Canadian. It trades about -0.16 of its total potential returns per unit of risk. Hamilton Enhanced Canadian is currently generating about 0.28 per unit of volatility. If you would invest  2,325  in Hamilton Enhanced Canadian on September 14, 2024 and sell it today you would earn a total of  229.00  from holding Hamilton Enhanced Canadian or generate 9.85% return on investment over 90 days.

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

BetaPro NASDAQ 100 2x  vs.  Hamilton Enhanced Canadian

BetaPro NASDAQ 100

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BetaPro NASDAQ 100 2x 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 Etf's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Hamilton Enhanced

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Enhanced Canadian are ranked lower than 21 (%) 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.

Pair Trading with BetaPro NASDAQ and Hamilton Enhanced

The main advantage of trading using opposite BetaPro NASDAQ and Hamilton Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ 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 BetaPro NASDAQ 100 2x and Hamilton Enhanced Canadian 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.