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 Canada, 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
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and BMO is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and BMO MSCI Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO MSCI Canada 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 Canada 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 under-perform the BMO MSCI. In addition to that, BetaPro NASDAQ is 3.28 times more volatile than BMO MSCI Canada. It trades about -0.07 of its total potential returns per unit of risk. BMO MSCI Canada is currently generating about 0.12 per unit of volatility. If you would invest 2,732 in BMO MSCI Canada on September 1, 2024 and sell it today you would earn a total of 327.00 from holding BMO MSCI Canada or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. BMO MSCI Canada
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| BMO MSCI Canada |
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 SPTSX Capped | BetaPro NASDAQ vs. Forstrong Global Income | BetaPro NASDAQ vs. BMO Aggregate Bond | BetaPro NASDAQ vs. iShares Canadian HYBrid |
| BMO MSCI vs. BMO MSCI USA | BMO MSCI vs. BMO Low Volatility | BMO MSCI vs. BMO International Dividend | BMO MSCI vs. BMO Low Volatility |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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