Correlation Between SPTSX Dividend and BMO SP
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By analyzing existing cross correlation between SPTSX Dividend Aristocrats and BMO SP 500, you can compare the effects of market volatilities on SPTSX Dividend and BMO SP 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 SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and BMO SP.
Diversification Opportunities for SPTSX Dividend and BMO SP
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPTSX and BMO is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and BMO SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO SP 500 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 SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO SP 500 has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and BMO SP go up and down completely randomly.
Pair Corralation between SPTSX Dividend and BMO SP
Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 1.59 times less return on investment than BMO SP. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 1.86 times less risky than BMO SP. It trades about 0.42 of its potential returns per unit of risk. BMO SP 500 is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 7,882 in BMO SP 500 on September 1, 2024 and sell it today you would earn a total of 465.00 from holding BMO SP 500 or generate 5.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
SPTSX Dividend Aristocrats vs. BMO SP 500
Performance |
| Timeline |
SPTSX Dividend and BMO SP Volatility Contrast
Predicted Return Density |
| Returns |
SPTSX Dividend Aristocrats
Pair trading matchups for SPTSX Dividend
BMO SP 500
Pair trading matchups for BMO SP
Pair Trading with SPTSX Dividend and BMO SP
The main advantage of trading using opposite SPTSX Dividend and BMO SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, BMO SP 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 SP will offset losses from the drop in BMO SP'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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