Correlation Between Bank Of Montreal and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Bank Of Montreal and ProShares UltraPro 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 UltraPro 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 UltraPro Russell2000, you can compare the effects of market volatilities on Bank Of Montreal and ProShares UltraPro 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 UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Of Montreal and ProShares UltraPro.
Diversification Opportunities for Bank Of Montreal and ProShares UltraPro
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and ProShares is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank Of Montreal and ProShares UltraPro Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro 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 UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro has no effect on the direction of Bank Of Montreal i.e., Bank Of Montreal and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Bank Of Montreal and ProShares UltraPro
Given the investment horizon of 90 days Bank Of Montreal is expected to generate 1.02 times less return on investment than ProShares UltraPro. But when comparing it to its historical volatility, Bank Of Montreal is 1.09 times less risky than ProShares UltraPro. It trades about 0.05 of its potential returns per unit of risk. ProShares UltraPro Russell2000 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,114 in ProShares UltraPro Russell2000 on August 31, 2024 and sell it today you would earn a total of 2,381 from holding ProShares UltraPro Russell2000 or generate 57.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.94% |
| Values | Daily Returns |
Bank Of Montreal vs. ProShares UltraPro Russell2000
Performance |
| Timeline |
| Bank Of Montreal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProShares UltraPro |
Bank Of Montreal and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Of Montreal and ProShares UltraPro
The main advantage of trading using opposite Bank Of Montreal and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Of Montreal position performs unexpectedly, ProShares UltraPro 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 UltraPro will offset losses from the drop in ProShares UltraPro's long position.| Bank Of Montreal vs. MicroSectors FANG Index | Bank Of Montreal vs. MicroSectors Solactive FANG | Bank Of Montreal vs. Direxion Daily Regional |
| ProShares UltraPro vs. ProShares UltraPro MidCap400 | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Dow30 | ProShares UltraPro vs. ProShares UltraPro SP500 |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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