Correlation Between 3iQ Bitcoin and BMO Global
Can any of the company-specific risk be diversified away by investing in both 3iQ Bitcoin and BMO Global 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 Global 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 Global Infrastructure, you can compare the effects of market volatilities on 3iQ Bitcoin and BMO Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ Bitcoin and BMO Global.
Diversification Opportunities for 3iQ Bitcoin and BMO Global
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 3iQ and BMO is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and BMO Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Global Infrastructure 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Global Infrastructure has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and BMO Global go up and down completely randomly.
Pair Corralation between 3iQ Bitcoin and BMO Global
Assuming the 90 days trading horizon 3iQ Bitcoin ETF is expected to generate 4.82 times more return on investment than BMO Global. However, 3iQ Bitcoin is 4.82 times more volatile than BMO Global Infrastructure. It trades about 0.25 of its potential returns per unit of risk. BMO Global Infrastructure is currently generating about 0.3 per unit of risk. If you would invest 1,277 in 3iQ Bitcoin ETF on August 28, 2024 and sell it today you would earn a total of 833.00 from holding 3iQ Bitcoin ETF or generate 65.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
3iQ Bitcoin ETF vs. BMO Global Infrastructure
Performance |
| Timeline |
| 3iQ Bitcoin ETF |
| BMO Global Infrastructure |
3iQ Bitcoin and BMO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3iQ Bitcoin and BMO Global
The main advantage of trading using opposite 3iQ Bitcoin and BMO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3iQ Bitcoin position performs unexpectedly, BMO Global 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 Global will offset losses from the drop in BMO Global'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 Global vs. BMO Equal Weight | BMO Global vs. BMO Low Volatility | BMO Global vs. BMO Equal Weight | BMO Global vs. BMO MSCI Emerging |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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