Correlation Between Fidelity High and BMO Covered
Can any of the company-specific risk be diversified away by investing in both Fidelity High and BMO Covered 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 Fidelity High and BMO Covered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity High Dividend and BMO Covered Call, you can compare the effects of market volatilities on Fidelity High and BMO Covered 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 Fidelity High with a short position of BMO Covered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity High and BMO Covered.
Diversification Opportunities for Fidelity High and BMO Covered
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and BMO is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity High Dividend and BMO Covered Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Covered Call and Fidelity High 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 Fidelity High Dividend are associated (or correlated) with BMO Covered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Covered Call has no effect on the direction of Fidelity High i.e., Fidelity High and BMO Covered go up and down completely randomly.
Pair Corralation between Fidelity High and BMO Covered
Assuming the 90 days trading horizon Fidelity High is expected to generate 1.15 times less return on investment than BMO Covered. In addition to that, Fidelity High is 1.07 times more volatile than BMO Covered Call. It trades about 0.14 of its total potential returns per unit of risk. BMO Covered Call is currently generating about 0.17 per unit of volatility. If you would invest 998.00 in BMO Covered Call on September 1, 2024 and sell it today you would earn a total of 111.00 from holding BMO Covered Call or generate 11.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Fidelity High Dividend vs. BMO Covered Call
Performance |
| Timeline |
| Fidelity High Dividend |
| BMO Covered Call |
Fidelity High and BMO Covered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity High and BMO Covered
The main advantage of trading using opposite Fidelity High and BMO Covered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity High position performs unexpectedly, BMO Covered 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 Covered will offset losses from the drop in BMO Covered's long position.| Fidelity High vs. Vanguard Dividend Appreciation | Fidelity High vs. Vanguard Total Market | Fidelity High vs. Vanguard FTSE Emerging | Fidelity High vs. Vanguard FTSE Global |
| BMO Covered vs. BMO Covered Call | BMO Covered vs. BMO Canadian High | BMO Covered vs. BMO Europe High | BMO Covered vs. Harvest Healthcare Leaders |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |