Correlation Between Bank of Montreal and FuelPositive Corp
Can any of the company-specific risk be diversified away by investing in both Bank of Montreal and FuelPositive Corp 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 FuelPositive Corp 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 FuelPositive Corp, you can compare the effects of market volatilities on Bank of Montreal and FuelPositive Corp 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 FuelPositive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Montreal and FuelPositive Corp.
Diversification Opportunities for Bank of Montreal and FuelPositive Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and FuelPositive is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal and FuelPositive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelPositive Corp 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 FuelPositive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelPositive Corp has no effect on the direction of Bank of Montreal i.e., Bank of Montreal and FuelPositive Corp go up and down completely randomly.
Pair Corralation between Bank of Montreal and FuelPositive Corp
Assuming the 90 days trading horizon Bank of Montreal is expected to generate 3.43 times less return on investment than FuelPositive Corp. But when comparing it to its historical volatility, Bank of Montreal is 18.06 times less risky than FuelPositive Corp. It trades about 0.28 of its potential returns per unit of risk. FuelPositive Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.00 in FuelPositive Corp on November 3, 2024 and sell it today you would earn a total of 0.00 from holding FuelPositive Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Montreal vs. FuelPositive Corp
Performance |
| Timeline |
| Bank of Montreal |
| FuelPositive Corp |
Bank of Montreal and FuelPositive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Montreal and FuelPositive Corp
The main advantage of trading using opposite Bank of Montreal and FuelPositive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Montreal position performs unexpectedly, FuelPositive Corp 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 FuelPositive Corp will offset losses from the drop in FuelPositive Corp's long position.| Bank of Montreal vs. Royal Bank of | Bank of Montreal vs. Canadian Imperial Bank | Bank of Montreal vs. Bank of Nova | Bank of Montreal vs. Toronto Dominion Bank |
| FuelPositive Corp vs. FuelPositive Corp | FuelPositive Corp vs. Eguana Technologies | FuelPositive Corp vs. Exro Technologies |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |