Correlation Between IShares MSCI and Hamilton Gold

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Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Hamilton Gold 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 IShares MSCI and Hamilton Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Min and Hamilton Gold Producer, you can compare the effects of market volatilities on IShares MSCI and Hamilton Gold 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 IShares MSCI with a short position of Hamilton Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Hamilton Gold.

Diversification Opportunities for IShares MSCI and Hamilton Gold

0.75
  Correlation Coefficient

Poor diversification

The 3 months correlation between IShares and Hamilton is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Min and Hamilton Gold Producer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Gold Producer and IShares MSCI 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 iShares MSCI Min are associated (or correlated) with Hamilton Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Gold Producer has no effect on the direction of IShares MSCI i.e., IShares MSCI and Hamilton Gold go up and down completely randomly.

Pair Corralation between IShares MSCI and Hamilton Gold

Assuming the 90 days trading horizon IShares MSCI is expected to generate 6.34 times less return on investment than Hamilton Gold. But when comparing it to its historical volatility, iShares MSCI Min is 4.12 times less risky than Hamilton Gold. It trades about 0.1 of its potential returns per unit of risk. Hamilton Gold Producer is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,764  in Hamilton Gold Producer on August 28, 2025 and sell it today you would earn a total of  642.00  from holding Hamilton Gold Producer or generate 23.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

iShares MSCI Min  vs.  Hamilton Gold Producer

 Performance 
       Timeline  
iShares MSCI Min 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI Min are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares MSCI is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Hamilton Gold Producer 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Gold Producer are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hamilton Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

IShares MSCI and Hamilton Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares MSCI and Hamilton Gold

The main advantage of trading using opposite IShares MSCI and Hamilton Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Hamilton Gold 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 Gold will offset losses from the drop in Hamilton Gold's long position.
The idea behind iShares MSCI Min and Hamilton Gold Producer 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 Transaction History module to view history of all your transactions and understand their impact on performance.

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