Correlation Between Accelerate Absolute and BMO Short
Can any of the company-specific risk be diversified away by investing in both Accelerate Absolute and BMO Short at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Accelerate Absolute and BMO Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accelerate Absolute Return and BMO Short Term Bond, you can compare the effects of market volatilities on Accelerate Absolute 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 Accelerate Absolute with a short position of BMO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accelerate Absolute and BMO Short.
Diversification Opportunities for Accelerate Absolute and BMO Short
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Accelerate and BMO is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Accelerate Absolute Return and BMO Short Term Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Short Term and Accelerate Absolute 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 Accelerate Absolute Return 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 Term has no effect on the direction of Accelerate Absolute i.e., Accelerate Absolute and BMO Short go up and down completely randomly.
Pair Corralation between Accelerate Absolute and BMO Short
Assuming the 90 days trading horizon Accelerate Absolute Return is expected to generate 5.49 times more return on investment than BMO Short. However, Accelerate Absolute is 5.49 times more volatile than BMO Short Term Bond. It trades about 0.1 of its potential returns per unit of risk. BMO Short Term Bond is currently generating about 0.16 per unit of risk. If you would invest 2,540 in Accelerate Absolute Return on September 3, 2024 and sell it today you would earn a total of 283.00 from holding Accelerate Absolute Return or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accelerate Absolute Return vs. BMO Short Term Bond
Performance |
| Timeline |
| Accelerate Absolute |
| BMO Short Term |
Accelerate Absolute and BMO Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accelerate Absolute and BMO Short
The main advantage of trading using opposite Accelerate Absolute and BMO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accelerate Absolute 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.| Accelerate Absolute vs. Global X Active | Accelerate Absolute vs. Global X Active | Accelerate Absolute vs. Global X Active | Accelerate Absolute vs. Global X Active |
| BMO Short vs. BMO Short Federal | BMO Short vs. BMO Short Corporate | BMO Short vs. BMO Mid Corporate | BMO Short vs. BMO Long Corporate |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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