Correlation Between Global X and BMO
Can any of the company-specific risk be diversified away by investing in both Global X and BMO 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 Global X and BMO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X FinTech and BMO, you can compare the effects of market volatilities on Global X and BMO 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 Global X with a short position of BMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BMO.
Diversification Opportunities for Global X and BMO
Pay attention - limited upside
The 3 months correlation between Global and BMO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X FinTech and BMO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO and Global X 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 Global X FinTech are associated (or correlated) with BMO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO has no effect on the direction of Global X i.e., Global X and BMO go up and down completely randomly.
Pair Corralation between Global X and BMO
If you would invest 1,971 in Global X FinTech on August 29, 2024 and sell it today you would earn a total of 1,412 from holding Global X FinTech or generate 71.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Global X FinTech vs. BMO
Performance |
| Timeline |
| Global X FinTech |
| BMO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global X and BMO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BMO
The main advantage of trading using opposite Global X and BMO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, BMO 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 will offset losses from the drop in BMO's long position.| Global X vs. Amplify ETF Trust | Global X vs. Global X Cloud | Global X vs. Global X Internet | Global X vs. First Trust Cloud |
| BMO vs. Global X FinTech | BMO vs. iShares Genomics Immunology | BMO vs. ABIVAX Socit Anonyme | BMO vs. HUMANA INC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |