Correlation Between BMO Global and CI ONE
Can any of the company-specific risk be diversified away by investing in both BMO Global and CI ONE 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 CI ONE 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 CI ONE Global, you can compare the effects of market volatilities on BMO Global and CI ONE 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 CI ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Global and CI ONE.
Diversification Opportunities for BMO Global and CI ONE
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BMO and ONEQ is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding BMO Global Consumer and CI ONE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI ONE Global 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 CI ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI ONE Global has no effect on the direction of BMO Global i.e., BMO Global and CI ONE go up and down completely randomly.
Pair Corralation between BMO Global and CI ONE
Assuming the 90 days trading horizon BMO Global Consumer is expected to generate 1.34 times more return on investment than CI ONE. However, BMO Global is 1.34 times more volatile than CI ONE Global. It trades about 0.09 of its potential returns per unit of risk. CI ONE Global is currently generating about 0.11 per unit of risk. If you would invest 2,835 in BMO Global Consumer on September 3, 2024 and sell it today you would earn a total of 1,427 from holding BMO Global Consumer or generate 50.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Global Consumer vs. CI ONE Global
Performance |
| Timeline |
| BMO Global Consumer |
| CI ONE Global |
BMO Global and CI ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Global and CI ONE
The main advantage of trading using opposite BMO Global and CI ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Global position performs unexpectedly, CI ONE 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 CI ONE will offset losses from the drop in CI ONE's long position.| BMO Global vs. BMO Global Consumer | BMO Global vs. BMO Global Communications | BMO Global vs. BMO SPTSX Equal | BMO Global vs. iShares SP Global |
| CI ONE vs. CI MidCap Dividend | CI ONE vs. CI Yield Enhanced | CI ONE vs. CI Canadian Short Term | CI ONE vs. CI ONE North |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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