Correlation Between Bank of Montreal and Atrium Mortgage
Can any of the company-specific risk be diversified away by investing in both Bank of Montreal and Atrium Mortgage 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 Bank of Montreal and Atrium Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Montreal and Atrium Mortgage Investment, you can compare the effects of market volatilities on Bank of Montreal and Atrium Mortgage 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 Bank of Montreal with a short position of Atrium Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Montreal and Atrium Mortgage.
Diversification Opportunities for Bank of Montreal and Atrium Mortgage
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Atrium is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal and Atrium Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Mortgage Inve and Bank of Montreal 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 Bank of Montreal are associated (or correlated) with Atrium Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Mortgage Inve has no effect on the direction of Bank of Montreal i.e., Bank of Montreal and Atrium Mortgage go up and down completely randomly.
Pair Corralation between Bank of Montreal and Atrium Mortgage
Assuming the 90 days trading horizon Bank of Montreal is expected to generate 20.16 times less return on investment than Atrium Mortgage. But when comparing it to its historical volatility, Bank of Montreal is 15.02 times less risky than Atrium Mortgage. It trades about 0.28 of its potential returns per unit of risk. Atrium Mortgage Investment is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,092 in Atrium Mortgage Investment on September 3, 2024 and sell it today you would earn a total of 44.00 from holding Atrium Mortgage Investment or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Bank of Montreal vs. Atrium Mortgage Investment
Performance |
| Timeline |
| Bank of Montreal |
| Atrium Mortgage Inve |
Bank of Montreal and Atrium Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Montreal and Atrium Mortgage
The main advantage of trading using opposite Bank of Montreal and Atrium Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Montreal position performs unexpectedly, Atrium Mortgage 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 Atrium Mortgage will offset losses from the drop in Atrium Mortgage's long position.| Bank of Montreal vs. Atrium Mortgage Investment | Bank of Montreal vs. Canadian General Investments | Bank of Montreal vs. Bip Investment Corp | Bank of Montreal vs. TGS Esports |
| Atrium Mortgage vs. Timbercreek Financial Corp | Atrium Mortgage vs. Firm Capital Mortgage | Atrium Mortgage vs. MCAN Mortgage | Atrium Mortgage vs. First National Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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