Correlation Between DAX Index and Bank of Montreal
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By analyzing existing cross correlation between DAX Index and Bank of Montreal, you can compare the effects of market volatilities on DAX Index and Bank of Montreal 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 DAX Index with a short position of Bank of Montreal. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Bank of Montreal.
Diversification Opportunities for DAX Index and Bank of Montreal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Bank is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Bank of Montreal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Montreal and DAX Index 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 DAX Index are associated (or correlated) with Bank of Montreal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Montreal has no effect on the direction of DAX Index i.e., DAX Index and Bank of Montreal go up and down completely randomly.
Pair Corralation between DAX Index and Bank of Montreal
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Bank of Montreal. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 1.47 times less risky than Bank of Montreal. The index trades about -0.02 of its potential returns per unit of risk. The Bank of Montreal is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 8,007 in Bank of Montreal on August 28, 2024 and sell it today you would earn a total of 993.00 from holding Bank of Montreal or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Bank of Montreal
Performance |
| Timeline |
DAX Index and Bank of Montreal Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Bank of Montreal
Pair trading matchups for Bank of Montreal
Pair Trading with DAX Index and Bank of Montreal
The main advantage of trading using opposite DAX Index and Bank of Montreal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Bank of Montreal 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 Bank of Montreal will offset losses from the drop in Bank of Montreal's long position.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Bank of Montreal vs. PRECISION DRILLING P | Bank of Montreal vs. Brockhaus Capital Management | Bank of Montreal vs. Jupiter Fund Management | Bank of Montreal vs. Southwest Airlines Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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