Correlation Between Hamilton Enhanced and BetaPro Natural

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

By analyzing existing cross correlation between Hamilton Enhanced Canadian and BetaPro Natural Gas, you can compare the effects of market volatilities on Hamilton Enhanced and BetaPro Natural 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 BetaPro Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Enhanced and BetaPro Natural.

Diversification Opportunities for Hamilton Enhanced and BetaPro Natural

-0.56

Correlation Coefficient

Hamilton Enhanced  BetaPro Natural

Excellent diversification

The 3 months correlation between Hamilton and BetaPro is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Enhanced Canadian and BetaPro Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Natural Gas 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 Canadian are associated (or correlated) with BetaPro Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Natural Gas has no effect on the direction of Hamilton Enhanced i.e., Hamilton Enhanced and BetaPro Natural go up and down completely randomly.

Pair Corralation between Hamilton Enhanced and BetaPro Natural

Assuming the 90 days trading horizon Hamilton Enhanced Canadian is expected to generate 0.09 times more return on investment than BetaPro Natural. However, Hamilton Enhanced Canadian is 11.45 times less risky than BetaPro Natural. It trades about 0.71 of its potential returns per unit of risk. BetaPro Natural Gas is currently generating about 0.01 per unit of risk. If you would invest  2,211  in Hamilton Enhanced Canadian on April 18, 2025 and sell it today you would earn a total of  563.00  from holding Hamilton Enhanced Canadian or generate 25.46% return on investment over 90 days.

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

Hamilton Enhanced Canadian  vs.  BetaPro Natural Gas

Hamilton Enhanced

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Enhanced Canadian are ranked lower than 56 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hamilton Enhanced displayed solid returns over the last few months and may actually be approaching a breakup point.

BetaPro Natural Gas

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Hamilton Enhanced Canadian and BetaPro Natural Gas 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.