Correlation Between Guardian and BMO Global
Can any of the company-specific risk be diversified away by investing in both Guardian and BMO Global 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 Guardian and BMO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian i3 Global and BMO Global Consumer, you can compare the effects of market volatilities on Guardian and BMO Global 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 Guardian with a short position of BMO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian and BMO Global.
Diversification Opportunities for Guardian and BMO Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guardian and BMO is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Guardian i3 Global and BMO Global Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Global Consumer and Guardian 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 Guardian i3 Global are associated (or correlated) with BMO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Global Consumer has no effect on the direction of Guardian i.e., Guardian and BMO Global go up and down completely randomly.
Pair Corralation between Guardian and BMO Global
Assuming the 90 days trading horizon Guardian is expected to generate 1.77 times less return on investment than BMO Global. In addition to that, Guardian is 1.05 times more volatile than BMO Global Consumer. It trades about 0.2 of its total potential returns per unit of risk. BMO Global Consumer is currently generating about 0.37 per unit of volatility. If you would invest 4,160 in BMO Global Consumer on September 13, 2024 and sell it today you would earn a total of 268.00 from holding BMO Global Consumer or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian i3 Global vs. BMO Global Consumer
Performance |
| Timeline |
| Guardian i3 Global |
| BMO Global Consumer |
Guardian and BMO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian and BMO Global
The main advantage of trading using opposite Guardian and BMO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian position performs unexpectedly, BMO Global 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 Global will offset losses from the drop in BMO Global's long position.| Guardian vs. Guardian i3 Quality | Guardian vs. Guardian Directed Premium | Guardian vs. Guardian Directed Equity | Guardian vs. CI ONE Global |
| BMO Global vs. BMO Global Consumer | BMO Global vs. BMO Global Communications | BMO Global vs. BMO SPTSX Equal | BMO Global vs. iShares SP Global |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |