Correlation Between Bank Of Montreal and ProShares

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Can any of the company-specific risk be diversified away by investing in both Bank Of Montreal and ProShares 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 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 SP 500, you can compare the effects of market volatilities on Bank Of Montreal and ProShares 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Of Montreal and ProShares.

Diversification Opportunities for Bank Of Montreal and ProShares

BankProSharesDiversified AwayBankProSharesDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bank and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Of Montreal and ProShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP 500 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP 500 has no effect on the direction of Bank Of Montreal i.e., Bank Of Montreal and ProShares go up and down completely randomly.

Pair Corralation between Bank Of Montreal and ProShares

If you would invest (100.00) in Bank Of Montreal on November 30, 2024 and sell it today you would earn a total of  100.00  from holding Bank Of Montreal or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Bank Of Montreal  vs.  ProShares SP 500

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -101234
JavaScript chart by amCharts 3.21.15NRGU SPXE
       Timeline  
Bank Of Montreal 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Bank Of Montreal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Bank Of Montreal is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
ProShares SP 500 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ProShares SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ProShares is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb62.56363.56464.56565.566

Bank Of Montreal and ProShares Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15NRGU SPXE
       Returns  

Pair Trading with Bank Of Montreal and ProShares

The main advantage of trading using opposite Bank Of Montreal and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Of Montreal position performs unexpectedly, ProShares 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 will offset losses from the drop in ProShares' long position.
The idea behind Bank Of Montreal and ProShares SP 500 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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