Correlation Between Condor Gold and BMO Mid
Can any of the company-specific risk be diversified away by investing in both Condor Gold and BMO Mid 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 Condor Gold and BMO Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Condor Gold Plc and BMO Mid Term IG, you can compare the effects of market volatilities on Condor Gold and BMO Mid 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 Condor Gold with a short position of BMO Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Condor Gold and BMO Mid.
Diversification Opportunities for Condor Gold and BMO Mid
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Condor and BMO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Condor Gold Plc and BMO Mid Term IG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Mid Term and Condor Gold 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 Condor Gold Plc are associated (or correlated) with BMO Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Mid Term has no effect on the direction of Condor Gold i.e., Condor Gold and BMO Mid go up and down completely randomly.
Pair Corralation between Condor Gold and BMO Mid
Assuming the 90 days trading horizon Condor Gold Plc is expected to generate 19.02 times more return on investment than BMO Mid. However, Condor Gold is 19.02 times more volatile than BMO Mid Term IG. It trades about 0.1 of its potential returns per unit of risk. BMO Mid Term IG is currently generating about 0.24 per unit of risk. If you would invest 36.00 in Condor Gold Plc on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Condor Gold Plc or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Condor Gold Plc vs. BMO Mid Term IG
Performance |
| Timeline |
| Condor Gold Plc |
| BMO Mid Term |
Condor Gold and BMO Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Condor Gold and BMO Mid
The main advantage of trading using opposite Condor Gold and BMO Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Condor Gold position performs unexpectedly, BMO Mid 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 Mid will offset losses from the drop in BMO Mid's long position.The idea behind Condor Gold Plc and BMO Mid Term IG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BMO Mid vs. BMO Mid Term IG | BMO Mid vs. BMO Mid Corporate | BMO Mid vs. CI Canadian Banks | BMO Mid vs. BMO Long Corporate |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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