Correlation Between CI Marret and BMO Global
Can any of the company-specific risk be diversified away by investing in both CI Marret 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 CI Marret and BMO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Marret Alternative and BMO Global Infrastructure, you can compare the effects of market volatilities on CI Marret 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 CI Marret with a short position of BMO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Marret and BMO Global.
Diversification Opportunities for CI Marret and BMO Global
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CMAR and BMO is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CI Marret Alternative 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 CI Marret 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 Marret Alternative 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 CI Marret i.e., CI Marret and BMO Global go up and down completely randomly.
Pair Corralation between CI Marret and BMO Global
Assuming the 90 days trading horizon CI Marret Alternative is expected to under-perform the BMO Global. But the etf apears to be less risky and, when comparing its historical volatility, CI Marret Alternative is 2.62 times less risky than BMO Global. The etf trades about -0.05 of its potential returns per unit of risk. The BMO Global Infrastructure is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 4,879 in BMO Global Infrastructure on August 28, 2024 and sell it today you would earn a total of 539.00 from holding BMO Global Infrastructure or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Marret Alternative vs. BMO Global Infrastructure
Performance |
| Timeline |
| CI Marret Alternative |
| BMO Global Infrastructure |
CI Marret and BMO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Marret and BMO Global
The main advantage of trading using opposite CI Marret and BMO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Marret 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.| CI Marret vs. Global Atomic Corp | CI Marret vs. enCore Energy Corp | CI Marret vs. Fission Uranium Corp | CI Marret vs. NexGen Energy |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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