Correlation Between Hamilton Enhanced and Vanguard FTSE

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

By analyzing existing cross correlation between Hamilton Enhanced Multi Sector and Vanguard FTSE Developed, you can compare the effects of market volatilities on Hamilton Enhanced and Vanguard FTSE 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hamilton Enhanced and Vanguard FTSE.

Diversification Opportunities for Hamilton Enhanced and Vanguard FTSE

0.59

Correlation Coefficient

Hamilton Enhanced  Vanguard FTSE

Very weak diversification

The 3 months correlation between Hamilton and Vanguard is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Enhanced Multi Sector and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed 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 Multi Sector are associated (or correlated) with Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of Hamilton Enhanced i.e., Hamilton Enhanced and Vanguard FTSE go up and down completely randomly.

Pair Corralation between Hamilton Enhanced and Vanguard FTSE

Assuming the 90 days trading horizon Hamilton Enhanced Multi Sector is expected to generate 0.62 times more return on investment than Vanguard FTSE. However, Hamilton Enhanced Multi Sector is 1.61 times less risky than Vanguard FTSE. It trades about 0.51 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about 0.22 per unit of risk. If you would invest  1,595  in Hamilton Enhanced Multi Sector on April 23, 2025 and sell it today you would earn a total of  231.00  from holding Hamilton Enhanced Multi Sector or generate 14.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Hamilton Enhanced Multi Sector  vs.  Vanguard FTSE Developed

Hamilton Enhanced Multi

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Enhanced Multi Sector are ranked lower than 40 (%) 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.

Vanguard FTSE Developed

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Developed are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Vanguard FTSE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Hamilton Enhanced and Vanguard FTSE

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

The idea behind Hamilton Enhanced Multi Sector and Vanguard FTSE Developed 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.

Check out your portfolio center.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .