Correlation Between Guardian and BMO Aggregate
Can any of the company-specific risk be diversified away by investing in both Guardian and BMO Aggregate 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 Aggregate 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 Aggregate Bond, you can compare the effects of market volatilities on Guardian and BMO Aggregate 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 Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian and BMO Aggregate.
Diversification Opportunities for Guardian and BMO Aggregate
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Guardian and BMO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guardian i3 Global and BMO Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Aggregate Bond 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 Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Aggregate Bond has no effect on the direction of Guardian i.e., Guardian and BMO Aggregate go up and down completely randomly.
Pair Corralation between Guardian and BMO Aggregate
Assuming the 90 days trading horizon Guardian i3 Global is expected to generate 2.69 times more return on investment than BMO Aggregate. However, Guardian is 2.69 times more volatile than BMO Aggregate Bond. It trades about 0.11 of its potential returns per unit of risk. BMO Aggregate Bond is currently generating about 0.01 per unit of risk. If you would invest 1,796 in Guardian i3 Global on November 27, 2024 and sell it today you would earn a total of 1,239 from holding Guardian i3 Global or generate 68.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian i3 Global vs. BMO Aggregate Bond
Performance |
| Timeline |
| Guardian i3 Global |
| BMO Aggregate Bond |
Guardian and BMO Aggregate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian and BMO Aggregate
The main advantage of trading using opposite Guardian and BMO Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian position performs unexpectedly, BMO Aggregate 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 Aggregate will offset losses from the drop in BMO Aggregate's long position.| Guardian vs. Guardian i3 Quality | Guardian vs. Guardian Directed Premium | Guardian vs. Guardian Directed Equity | Guardian vs. CI ONE Global |
| BMO Aggregate vs. BMO Short Term Bond | BMO Aggregate vs. BMO Canadian Bank | BMO Aggregate vs. BMO Aggregate Bond | BMO Aggregate vs. BMO Balanced ETF |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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