Correlation Between CI Canada and BMO Canadian
Can any of the company-specific risk be diversified away by investing in both CI Canada and BMO Canadian 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 Canada and BMO Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Canada Quality and BMO Canadian High, you can compare the effects of market volatilities on CI Canada and BMO Canadian 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 Canada with a short position of BMO Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Canada and BMO Canadian.
Diversification Opportunities for CI Canada and BMO Canadian
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DGRC and BMO is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CI Canada Quality and BMO Canadian High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Canadian High and CI Canada 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 Canada Quality are associated (or correlated) with BMO Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Canadian High has no effect on the direction of CI Canada i.e., CI Canada and BMO Canadian go up and down completely randomly.
Pair Corralation between CI Canada and BMO Canadian
Assuming the 90 days trading horizon CI Canada is expected to generate 2.01 times less return on investment than BMO Canadian. In addition to that, CI Canada is 1.45 times more volatile than BMO Canadian High. It trades about 0.08 of its total potential returns per unit of risk. BMO Canadian High is currently generating about 0.23 per unit of volatility. If you would invest 1,778 in BMO Canadian High on November 3, 2024 and sell it today you would earn a total of 41.00 from holding BMO Canadian High or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Canada Quality vs. BMO Canadian High
Performance |
| Timeline |
| CI Canada Quality |
| BMO Canadian High |
CI Canada and BMO Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Canada and BMO Canadian
The main advantage of trading using opposite CI Canada and BMO Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Canada position performs unexpectedly, BMO Canadian 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 Canadian will offset losses from the drop in BMO Canadian's long position.| CI Canada vs. iShares Core MSCI | CI Canada vs. SPDR Portfolio Emerging | CI Canada vs. SPDR Portfolio SP | CI Canada vs. iShares Canadian Short |
| BMO Canadian vs. BMO Short Term Bond | BMO Canadian vs. BMO Canadian Bank | BMO Canadian vs. BMO Aggregate Bond | BMO Canadian 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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