Correlation Between SPTSX Dividend and BMO Core
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and BMO Core Plus, you can compare the effects of market volatilities on SPTSX Dividend and BMO Core 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 SPTSX Dividend with a short position of BMO Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and BMO Core.
Diversification Opportunities for SPTSX Dividend and BMO Core
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SPTSX and BMO is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and BMO Core Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Core Plus and SPTSX Dividend 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 SPTSX Dividend Aristocrats are associated (or correlated) with BMO Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Core Plus has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and BMO Core go up and down completely randomly.
Pair Corralation between SPTSX Dividend and BMO Core
Assuming the 90 days trading horizon SPTSX Dividend Aristocrats is expected to generate 1.55 times more return on investment than BMO Core. However, SPTSX Dividend is 1.55 times more volatile than BMO Core Plus. It trades about 0.06 of its potential returns per unit of risk. BMO Core Plus is currently generating about 0.07 per unit of risk. If you would invest 30,645 in SPTSX Dividend Aristocrats on November 11, 2024 and sell it today you would earn a total of 4,957 from holding SPTSX Dividend Aristocrats or generate 16.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. BMO Core Plus
Performance |
| Timeline |
SPTSX Dividend and BMO Core Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
BMO Core Plus
Pair trading matchups for BMO Core
Pair Trading with SPTSX Dividend and BMO Core
The main advantage of trading using opposite SPTSX Dividend and BMO Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, BMO Core 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 Core will offset losses from the drop in BMO Core's long position.| SPTSX Dividend vs. E L Financial 3 | SPTSX Dividend vs. North American Financial | SPTSX Dividend vs. Osisko Metals | SPTSX Dividend vs. Financial 15 Split |
| BMO Core vs. BMO Mid Term IG | BMO Core vs. BMO Sustainable Global | BMO Core vs. BMO Government Bond | BMO Core vs. BMO Mid Corporate |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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