Correlation Between SPTSX Dividend and BMO Preferred
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and BMO Preferred Share, you can compare the effects of market volatilities on SPTSX Dividend and BMO Preferred 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 Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and BMO Preferred.
Diversification Opportunities for SPTSX Dividend and BMO Preferred
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPTSX and BMO is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and BMO Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Preferred Share 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 Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Preferred Share has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and BMO Preferred go up and down completely randomly.
Pair Corralation between SPTSX Dividend and BMO Preferred
Assuming the 90 days trading horizon SPTSX Dividend Aristocrats is expected to generate 0.7 times more return on investment than BMO Preferred. However, SPTSX Dividend Aristocrats is 1.43 times less risky than BMO Preferred. It trades about 0.25 of its potential returns per unit of risk. BMO Preferred Share is currently generating about -0.07 per unit of risk. If you would invest 35,647 in SPTSX Dividend Aristocrats on August 25, 2024 and sell it today you would earn a total of 1,713 from holding SPTSX Dividend Aristocrats or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. BMO Preferred Share
Performance |
| Timeline |
SPTSX Dividend and BMO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
BMO Preferred Share
Pair trading matchups for BMO Preferred
Pair Trading with SPTSX Dividend and BMO Preferred
The main advantage of trading using opposite SPTSX Dividend and BMO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, BMO Preferred 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 Preferred will offset losses from the drop in BMO Preferred's long position.| SPTSX Dividend vs. Contagious Gaming | SPTSX Dividend vs. Gamehost | SPTSX Dividend vs. Ramp Metals | SPTSX Dividend vs. Air Canada |
| BMO Preferred vs. BMO Europe High | BMO Preferred vs. BMO Equal Weight | BMO Preferred vs. BMO Covered Call |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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