Correlation Between 3iQ Bitcoin and BMO Preferred
Can any of the company-specific risk be diversified away by investing in both 3iQ Bitcoin and BMO Preferred 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 Preferred 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 Preferred Share, you can compare the effects of market volatilities on 3iQ Bitcoin and BMO Preferred 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 Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3iQ Bitcoin and BMO Preferred.
Diversification Opportunities for 3iQ Bitcoin and BMO Preferred
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3iQ and BMO is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding 3iQ Bitcoin ETF and BMO Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Preferred Share 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 Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Preferred Share has no effect on the direction of 3iQ Bitcoin i.e., 3iQ Bitcoin and BMO Preferred go up and down completely randomly.
Pair Corralation between 3iQ Bitcoin and BMO Preferred
Assuming the 90 days trading horizon 3iQ Bitcoin ETF is expected to generate 6.25 times more return on investment than BMO Preferred. However, 3iQ Bitcoin is 6.25 times more volatile than BMO Preferred Share. It trades about 0.02 of its potential returns per unit of risk. BMO Preferred Share is currently generating about -0.15 per unit of risk. If you would invest 2,187 in 3iQ Bitcoin ETF on September 22, 2024 and sell it today you would earn a total of 12.00 from holding 3iQ Bitcoin ETF or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
3iQ Bitcoin ETF vs. BMO Preferred Share
Performance |
| Timeline |
| 3iQ Bitcoin ETF |
| BMO Preferred Share |
3iQ Bitcoin and BMO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3iQ Bitcoin and BMO Preferred
The main advantage of trading using opposite 3iQ Bitcoin and BMO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3iQ Bitcoin position performs unexpectedly, BMO Preferred 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 Preferred will offset losses from the drop in BMO Preferred's long position.| 3iQ Bitcoin vs. BMO Aggregate Bond | 3iQ Bitcoin vs. iShares Canadian HYBrid | 3iQ Bitcoin vs. Brompton European Dividend | 3iQ Bitcoin vs. Solar Alliance Energy |
| BMO Preferred vs. BMO Preferred Share | BMO Preferred vs. BMO Put Write | BMO Preferred vs. BMO High Yield | BMO Preferred vs. BMO Put Write |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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