Correlation Between Lysander Slater and BMO Preferred
Can any of the company-specific risk be diversified away by investing in both Lysander Slater and BMO Preferred 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 Lysander Slater and BMO Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lysander Slater Preferred Share and BMO Preferred Share, you can compare the effects of market volatilities on Lysander Slater and BMO Preferred 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 Lysander Slater with a short position of BMO Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lysander Slater and BMO Preferred.
Diversification Opportunities for Lysander Slater and BMO Preferred
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lysander and BMO is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lysander Slater Preferred Shar and BMO Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Preferred Share and Lysander Slater 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 Lysander Slater Preferred Share are associated (or correlated) with BMO Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Preferred Share has no effect on the direction of Lysander Slater i.e., Lysander Slater and BMO Preferred go up and down completely randomly.
Pair Corralation between Lysander Slater and BMO Preferred
Assuming the 90 days horizon Lysander Slater is expected to generate 1.36 times less return on investment than BMO Preferred. But when comparing it to its historical volatility, Lysander Slater Preferred Share is 2.41 times less risky than BMO Preferred. It trades about 0.13 of its potential returns per unit of risk. BMO Preferred Share is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,807 in BMO Preferred Share on November 2, 2024 and sell it today you would earn a total of 24.00 from holding BMO Preferred Share or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lysander Slater Preferred Shar vs. BMO Preferred Share
Performance |
| Timeline |
| Lysander Slater Pref |
| BMO Preferred Share |
Lysander Slater and BMO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lysander Slater and BMO Preferred
The main advantage of trading using opposite Lysander Slater and BMO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lysander Slater position performs unexpectedly, BMO Preferred 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 Preferred will offset losses from the drop in BMO Preferred's long position.| Lysander Slater vs. Evolve Active Canadian | Lysander Slater vs. Global X Active | Lysander Slater vs. RBC Canadian Preferred | Lysander Slater vs. Global X Active |
| BMO Preferred vs. BMO Preferred Share | BMO Preferred vs. BMO Put Write | BMO Preferred vs. BMO High Yield | BMO Preferred vs. BMO Put Write |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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