Correlation Between SPTSX Dividend and BMO Monthly
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and BMO Monthly Income, you can compare the effects of market volatilities on SPTSX Dividend and BMO Monthly 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 Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and BMO Monthly.
Diversification Opportunities for SPTSX Dividend and BMO Monthly
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPTSX and BMO is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and BMO Monthly Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Monthly Income 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 Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Monthly Income has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and BMO Monthly go up and down completely randomly.
Pair Corralation between SPTSX Dividend and BMO Monthly
Assuming the 90 days trading horizon SPTSX Dividend Aristocrats is expected to generate 1.53 times more return on investment than BMO Monthly. However, SPTSX Dividend is 1.53 times more volatile than BMO Monthly Income. It trades about 0.25 of its potential returns per unit of risk. BMO Monthly Income is currently generating about 0.2 per unit of risk. If you would invest 31,766 in SPTSX Dividend Aristocrats on September 3, 2024 and sell it today you would earn a total of 5,805 from holding SPTSX Dividend Aristocrats or generate 18.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.43% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. BMO Monthly Income
Performance |
| Timeline |
SPTSX Dividend and BMO Monthly Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
BMO Monthly Income
Pair trading matchups for BMO Monthly
Pair Trading with SPTSX Dividend and BMO Monthly
The main advantage of trading using opposite SPTSX Dividend and BMO Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, BMO Monthly 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 Monthly will offset losses from the drop in BMO Monthly's long position.| SPTSX Dividend vs. 2028 Investment Grade | SPTSX Dividend vs. Upstart Investments | SPTSX Dividend vs. Brookfield Investments | SPTSX Dividend vs. Atrium Mortgage Investment |
| BMO Monthly vs. BMO International Dividend | BMO Monthly vs. BMO Equal Weight | BMO Monthly vs. BMO Covered Call | BMO Monthly vs. BMO High Yield |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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