Correlation Between PHN Multi and BMO Aggregate
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By analyzing existing cross correlation between PHN Multi Style All Cap and BMO Aggregate Bond, you can compare the effects of market volatilities on PHN Multi and BMO Aggregate 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 PHN Multi with a short position of BMO Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHN Multi and BMO Aggregate.
Diversification Opportunities for PHN Multi and BMO Aggregate
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PHN and BMO is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PHN Multi Style All Cap and BMO Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Aggregate Bond and PHN Multi 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 PHN Multi Style All Cap are associated (or correlated) with BMO Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Aggregate Bond has no effect on the direction of PHN Multi i.e., PHN Multi and BMO Aggregate go up and down completely randomly.
Pair Corralation between PHN Multi and BMO Aggregate
Assuming the 90 days trading horizon PHN Multi Style All Cap is expected to generate 3.14 times more return on investment than BMO Aggregate. However, PHN Multi is 3.14 times more volatile than BMO Aggregate Bond. It trades about 0.03 of its potential returns per unit of risk. BMO Aggregate Bond is currently generating about 0.04 per unit of risk. If you would invest 2,617 in PHN Multi Style All Cap on October 23, 2024 and sell it today you would earn a total of 13.00 from holding PHN Multi Style All Cap or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
PHN Multi Style All Cap vs. BMO Aggregate Bond
Performance |
| Timeline |
| PHN Multi Style |
| BMO Aggregate Bond |
PHN Multi and BMO Aggregate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHN Multi and BMO Aggregate
The main advantage of trading using opposite PHN Multi and BMO Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHN Multi position performs unexpectedly, BMO Aggregate 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 BMO Aggregate will offset losses from the drop in BMO Aggregate's long position.The idea behind PHN Multi Style All Cap and BMO Aggregate Bond 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.| BMO Aggregate vs. BMO Short Term Bond | BMO Aggregate vs. BMO Canadian Bank | BMO Aggregate vs. BMO Aggregate Bond | BMO Aggregate vs. BMO Balanced ETF |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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