Correlation Between SPTSX Dividend and BMO Short
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and BMO Short Provincial, you can compare the effects of market volatilities on SPTSX Dividend and BMO Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and BMO Short.
Diversification Opportunities for SPTSX Dividend and BMO Short
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SPTSX and BMO is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and BMO Short Provincial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Short Provincial 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Short Provincial has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and BMO Short go up and down completely randomly.
Pair Corralation between SPTSX Dividend and BMO Short
Assuming the 90 days trading horizon SPTSX Dividend Aristocrats is expected to generate 3.21 times more return on investment than BMO Short. However, SPTSX Dividend is 3.21 times more volatile than BMO Short Provincial. It trades about 0.15 of its potential returns per unit of risk. BMO Short Provincial is currently generating about -0.02 per unit of risk. If you would invest 36,732 in SPTSX Dividend Aristocrats on August 29, 2024 and sell it today you would earn a total of 558.00 from holding SPTSX Dividend Aristocrats or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. BMO Short Provincial
Performance |
| Timeline |
SPTSX Dividend and BMO Short Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
BMO Short Provincial
Pair trading matchups for BMO Short
Pair Trading with SPTSX Dividend and BMO Short
The main advantage of trading using opposite SPTSX Dividend and BMO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, BMO Short 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 Short will offset losses from the drop in BMO Short's long position.| SPTSX Dividend vs. High Liner Foods | SPTSX Dividend vs. TUT Fitness Group | SPTSX Dividend vs. MTY Food Group | SPTSX Dividend vs. UnitedHealth Group CDR |
| BMO Short vs. Mackenzie Canadian Aggregate | BMO Short vs. Mackenzie Core Plus | BMO Short vs. Mackenzie Investment Grade | BMO Short vs. Mackenzie Core Plus |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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