Correlation Between BMO Global and Harvest Global
Can any of the company-specific risk be diversified away by investing in both BMO Global and Harvest 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 BMO Global and Harvest Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO Global Consumer and Harvest Global REIT, you can compare the effects of market volatilities on BMO Global and Harvest 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 BMO Global with a short position of Harvest Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Global and Harvest Global.
Diversification Opportunities for BMO Global and Harvest Global
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BMO and Harvest is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BMO Global Consumer and Harvest Global REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Global REIT and BMO 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 BMO Global Consumer are associated (or correlated) with Harvest Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Global REIT has no effect on the direction of BMO Global i.e., BMO Global and Harvest Global go up and down completely randomly.
Pair Corralation between BMO Global and Harvest Global
Assuming the 90 days trading horizon BMO Global Consumer is expected to generate 0.87 times more return on investment than Harvest Global. However, BMO Global Consumer is 1.15 times less risky than Harvest Global. It trades about 0.11 of its potential returns per unit of risk. Harvest Global REIT is currently generating about 0.05 per unit of risk. If you would invest 3,260 in BMO Global Consumer on September 12, 2024 and sell it today you would earn a total of 1,168 from holding BMO Global Consumer or generate 35.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Global Consumer vs. Harvest Global REIT
Performance |
| Timeline |
| BMO Global Consumer |
| Harvest Global REIT |
BMO Global and Harvest Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Global and Harvest Global
The main advantage of trading using opposite BMO Global and Harvest Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Global position performs unexpectedly, Harvest 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 Harvest Global will offset losses from the drop in Harvest Global's long position.| BMO Global vs. Guardian i3 Global | BMO Global vs. CI Global Real | BMO Global vs. CI Enhanced Short | BMO Global vs. BMO Aggregate Bond |
| Harvest Global vs. Harvest Equal Weight | Harvest Global vs. Harvest Brand Leaders | Harvest Global vs. Energy Leaders Plus | Harvest Global vs. Harvest Tech Achievers |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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