Correlation Between Bank of Montreal and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Bank of Montreal and ProShares Ultra 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 Bank of Montreal and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Montreal and ProShares Ultra Dow30, you can compare the effects of market volatilities on Bank of Montreal and ProShares Ultra 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 Bank of Montreal with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Montreal and ProShares Ultra.
Diversification Opportunities for Bank of Montreal and ProShares Ultra
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and ProShares is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal and ProShares Ultra Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Dow30 and Bank of Montreal 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 Bank of Montreal are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Dow30 has no effect on the direction of Bank of Montreal i.e., Bank of Montreal and ProShares Ultra go up and down completely randomly.
Pair Corralation between Bank of Montreal and ProShares Ultra
Given the investment horizon of 90 days Bank of Montreal is expected to under-perform the ProShares Ultra. In addition to that, Bank of Montreal is 2.51 times more volatile than ProShares Ultra Dow30. It trades about -0.16 of its total potential returns per unit of risk. ProShares Ultra Dow30 is currently generating about -0.05 per unit of volatility. If you would invest 8,943 in ProShares Ultra Dow30 on January 13, 2025 and sell it today you would lose (681.00) from holding ProShares Ultra Dow30 or give up 7.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Montreal vs. ProShares Ultra Dow30
Performance |
| Timeline |
| Bank of Montreal |
| ProShares Ultra Dow30 |
Bank of Montreal and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Montreal and ProShares Ultra
The main advantage of trading using opposite Bank of Montreal and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Montreal position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.| Bank of Montreal vs. Bank of Montreal | Bank of Montreal vs. Bank of Montreal | Bank of Montreal vs. MicroSectors Solactive FANG | Bank of Montreal vs. Direxion Daily Regional |
| ProShares Ultra vs. ProShares Ultra SP500 | ProShares Ultra vs. ProShares UltraShort Dow30 | ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. ProShares Ultra Russell2000 |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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