Correlation Between Bitcoin ETF and BMO Sustainable
Can any of the company-specific risk be diversified away by investing in both Bitcoin ETF and BMO Sustainable 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 Sustainable 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 Sustainable Global, you can compare the effects of market volatilities on Bitcoin ETF and BMO Sustainable 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 Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin ETF and BMO Sustainable.
Diversification Opportunities for Bitcoin ETF and BMO Sustainable
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bitcoin and BMO is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin ETF CAD and BMO Sustainable Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Sustainable Global 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 Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Sustainable Global has no effect on the direction of Bitcoin ETF i.e., Bitcoin ETF and BMO Sustainable go up and down completely randomly.
Pair Corralation between Bitcoin ETF and BMO Sustainable
Assuming the 90 days trading horizon Bitcoin ETF CAD is expected to generate 13.29 times more return on investment than BMO Sustainable. However, Bitcoin ETF is 13.29 times more volatile than BMO Sustainable Global. It trades about 0.31 of its potential returns per unit of risk. BMO Sustainable Global is currently generating about 0.13 per unit of risk. If you would invest 3,457 in Bitcoin ETF CAD on August 29, 2024 and sell it today you would earn a total of 1,122 from holding Bitcoin ETF CAD or generate 32.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bitcoin ETF CAD vs. BMO Sustainable Global
Performance |
| Timeline |
| Bitcoin ETF CAD |
| BMO Sustainable Global |
Bitcoin ETF and BMO Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin ETF and BMO Sustainable
The main advantage of trading using opposite Bitcoin ETF and BMO Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin ETF position performs unexpectedly, BMO Sustainable 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 Sustainable will offset losses from the drop in BMO Sustainable'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 Sustainable vs. Purpose Total Return | BMO Sustainable vs. Purpose Multi Asset Income | BMO Sustainable vs. Purpose Strategic Yield | BMO Sustainable vs. BMO Aggregate Bond |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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