Correlation Between CI Global and BMO Low
Can any of the company-specific risk be diversified away by investing in both CI Global and BMO Low 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 CI Global and BMO Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Global Alpha and BMO Low Volatility, you can compare the effects of market volatilities on CI Global and BMO Low 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 CI Global with a short position of BMO Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and BMO Low.
Diversification Opportunities for CI Global and BMO Low
Excellent diversification
The 3 months correlation between CINV and BMO is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Alpha and BMO Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Low Volatility and CI Global 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 CI Global Alpha are associated (or correlated) with BMO Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Low Volatility has no effect on the direction of CI Global i.e., CI Global and BMO Low go up and down completely randomly.
Pair Corralation between CI Global and BMO Low
Assuming the 90 days trading horizon CI Global Alpha is expected to generate 2.52 times more return on investment than BMO Low. However, CI Global is 2.52 times more volatile than BMO Low Volatility. It trades about 0.12 of its potential returns per unit of risk. BMO Low Volatility is currently generating about 0.04 per unit of risk. If you would invest 1,224 in CI Global Alpha on November 2, 2024 and sell it today you would earn a total of 1,696 from holding CI Global Alpha or generate 138.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Global Alpha vs. BMO Low Volatility
Performance |
| Timeline |
| CI Global Alpha |
| BMO Low Volatility |
CI Global and BMO Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Global and BMO Low
The main advantage of trading using opposite CI Global and BMO Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Global position performs unexpectedly, BMO Low 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 Low will offset losses from the drop in BMO Low's long position.| CI Global vs. NBI High Yield | CI Global vs. NBI Unconstrained Fixed | CI Global vs. Mackenzie Developed ex North | CI Global vs. BMO Short Term Bond |
| BMO Low vs. BMO Low Volatility | BMO Low vs. BMO Low Volatility | BMO Low vs. BMO Low Volatility | BMO Low vs. BMO Dividend CAD |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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