Correlation Between BetaPro NASDAQ and BMO MSCI
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and BMO MSCI 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 BetaPro NASDAQ and BMO MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro NASDAQ 100 2x and BMO MSCI Global, you can compare the effects of market volatilities on BetaPro NASDAQ and BMO MSCI 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 BetaPro NASDAQ with a short position of BMO MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and BMO MSCI.
Diversification Opportunities for BetaPro NASDAQ and BMO MSCI
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and BMO is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and BMO MSCI Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO MSCI Global and BetaPro NASDAQ 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 BetaPro NASDAQ 100 2x are associated (or correlated) with BMO MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO MSCI Global has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and BMO MSCI go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and BMO MSCI
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 3.77 times more return on investment than BMO MSCI. However, BetaPro NASDAQ is 3.77 times more volatile than BMO MSCI Global. It trades about -0.01 of its potential returns per unit of risk. BMO MSCI Global is currently generating about -0.06 per unit of risk. If you would invest 1,007 in BetaPro NASDAQ 100 2x on October 9, 2024 and sell it today you would lose (13.00) from holding BetaPro NASDAQ 100 2x or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. BMO MSCI Global
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| BMO MSCI Global |
BetaPro NASDAQ and BMO MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and BMO MSCI
The main advantage of trading using opposite BetaPro NASDAQ and BMO MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, BMO MSCI 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 MSCI will offset losses from the drop in BMO MSCI's long position.| BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
| BMO MSCI vs. BMO MSCI USA | BMO MSCI vs. BMO MSCI Canada | BMO MSCI vs. BMO MSCI EAFE | BMO MSCI vs. BMO Balanced ESG |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |