Correlation Between Bitcoin ETF and BMO Mid
Can any of the company-specific risk be diversified away by investing in both Bitcoin ETF 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 Bitcoin ETF and BMO Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin ETF CAD and BMO Mid Federal, you can compare the effects of market volatilities on Bitcoin ETF 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 Bitcoin ETF with a short position of BMO Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and BMO Mid.
Diversification Opportunities for Bitcoin ETF and BMO Mid
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bitcoin and BMO is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and BMO Mid Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Mid Federal and Bitcoin ETF 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 Bitcoin ETF CAD 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 Federal has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and BMO Mid go up and down completely randomly.
Pair Corralation between Bitcoin ETF and BMO Mid
Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 6.82 times more return on investment than BMO Mid. However, Bitcoin ETF is 6.82 times more volatile than BMO Mid Federal. It trades about 0.12 of its potential returns per unit of risk. BMO Mid Federal is currently generating about 0.02 per unit of risk. If you would invest 943.00 in Bitcoin ETF CAD on September 3, 2024 and sell it today you would earn a total of 3,937 from holding Bitcoin ETF CAD or generate 417.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin ETF CAD vs. BMO Mid Federal
Performance |
| Timeline |
| Bitcoin ETF CAD |
| BMO Mid Federal |
Bitcoin ETF and BMO Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin ETF and BMO Mid
The main advantage of trading using opposite Bitcoin ETF and BMO Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin ETF 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.| Bitcoin ETF vs. Bitcoin ETF | Bitcoin ETF vs. NBI High Yield | Bitcoin ETF vs. NBI Unconstrained Fixed | Bitcoin ETF vs. Mackenzie Developed ex North |
| BMO Mid vs. BMO Short Corporate | BMO Mid vs. BMO High Yield | BMO Mid vs. iShares Core Canadian | BMO Mid vs. Harvest Global REIT |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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