Correlation Between CI Global and BMO Clean
Can any of the company-specific risk be diversified away by investing in both CI Global and BMO Clean 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 Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Global Climate and BMO Clean Energy, you can compare the effects of market volatilities on CI Global and BMO Clean 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 Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Global and BMO Clean.
Diversification Opportunities for CI Global and BMO Clean
Very good diversification
The 3 months correlation between CLML and BMO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CI Global Climate and BMO Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Clean Energy 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 Climate are associated (or correlated) with BMO Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Clean Energy has no effect on the direction of CI Global i.e., CI Global and BMO Clean go up and down completely randomly.
Pair Corralation between CI Global and BMO Clean
Assuming the 90 days trading horizon CI Global Climate is expected to generate 1.13 times more return on investment than BMO Clean. However, CI Global is 1.13 times more volatile than BMO Clean Energy. It trades about 0.32 of its potential returns per unit of risk. BMO Clean Energy is currently generating about -0.07 per unit of risk. If you would invest 3,335 in CI Global Climate on October 23, 2024 and sell it today you would earn a total of 252.00 from holding CI Global Climate or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
CI Global Climate vs. BMO Clean Energy
Performance |
| Timeline |
| CI Global Climate |
| BMO Clean Energy |
CI Global and BMO Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Global and BMO Clean
The main advantage of trading using opposite CI Global and BMO Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Global position performs unexpectedly, BMO Clean 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 Clean will offset losses from the drop in BMO Clean's long position.| CI Global vs. Vanguard FTSE Canada | CI Global vs. BMO Aggregate Bond | CI Global vs. iShares Core SP | CI Global vs. Vanguard FTSE Global |
| BMO Clean vs. BMO Short Term Bond | BMO Clean vs. BMO Canadian Bank | BMO Clean vs. BMO Aggregate Bond | BMO Clean vs. BMO Balanced ETF |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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