Correlation Between 3iQ Bitcoin and BMO Government
Can any of the company-specific risk be diversified away by investing in both 3iQ Bitcoin and BMO Government 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 3iQ Bitcoin and BMO Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3iQ Bitcoin ETF and BMO Government Bond, you can compare the effects of market volatilities on 3iQ Bitcoin and BMO Government 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 3iQ Bitcoin with a short position of BMO Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ Bitcoin and BMO Government.
Diversification Opportunities for 3iQ Bitcoin and BMO Government
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3iQ and BMO is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and BMO Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Government Bond and 3iQ Bitcoin 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 3iQ Bitcoin ETF are associated (or correlated) with BMO Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Government Bond has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and BMO Government go up and down completely randomly.
Pair Corralation between 3iQ Bitcoin and BMO Government
Assuming the 90 days trading horizon 3iQ Bitcoin ETF is expected to generate 8.66 times more return on investment than BMO Government. However, 3iQ Bitcoin is 8.66 times more volatile than BMO Government Bond. It trades about 0.11 of its potential returns per unit of risk. BMO Government Bond is currently generating about 0.12 per unit of risk. If you would invest 1,387 in 3iQ Bitcoin ETF on September 3, 2024 and sell it today you would earn a total of 782.00 from holding 3iQ Bitcoin ETF or generate 56.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3iQ Bitcoin ETF vs. BMO Government Bond
Performance |
| Timeline |
| 3iQ Bitcoin ETF |
| BMO Government Bond |
3iQ Bitcoin and BMO Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3iQ Bitcoin and BMO Government
The main advantage of trading using opposite 3iQ Bitcoin and BMO Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3iQ Bitcoin position performs unexpectedly, BMO Government 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 Government will offset losses from the drop in BMO Government's long position.| 3iQ Bitcoin vs. 3iQ CoinShares Ether | 3iQ Bitcoin vs. NBI High Yield | 3iQ Bitcoin vs. NBI Unconstrained Fixed | 3iQ Bitcoin vs. Mackenzie Developed ex North |
| BMO Government vs. BMO Short Corporate | BMO Government vs. BMO High Yield | BMO Government vs. iShares Core Canadian | BMO Government vs. Harvest Global REIT |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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