Correlation Between SPTSX Dividend and BMO Junior
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and BMO Junior Gold, you can compare the effects of market volatilities on SPTSX Dividend and BMO Junior 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 Junior. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and BMO Junior.
Diversification Opportunities for SPTSX Dividend and BMO Junior
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPTSX and BMO is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and BMO Junior Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Junior Gold 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 Junior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Junior Gold has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and BMO Junior go up and down completely randomly.
Pair Corralation between SPTSX Dividend and BMO Junior
Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 1.1 times less return on investment than BMO Junior. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 3.94 times less risky than BMO Junior. It trades about 0.26 of its potential returns per unit of risk. BMO Junior Gold is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,145 in BMO Junior Gold on September 1, 2024 and sell it today you would earn a total of 1,469 from holding BMO Junior Gold or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. BMO Junior Gold
Performance |
| Timeline |
SPTSX Dividend and BMO Junior Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
BMO Junior Gold
Pair trading matchups for BMO Junior
Pair Trading with SPTSX Dividend and BMO Junior
The main advantage of trading using opposite SPTSX Dividend and BMO Junior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, BMO Junior 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 Junior will offset losses from the drop in BMO Junior's long position.| SPTSX Dividend vs. Metalero Mining Corp | SPTSX Dividend vs. TUT Fitness Group | SPTSX Dividend vs. Dream Industrial Real | SPTSX Dividend vs. Nicola Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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