Correlation Between Lysander Slater and BMO Laddered
Can any of the company-specific risk be diversified away by investing in both Lysander Slater and BMO Laddered 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 Laddered 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 Laddered Preferred, you can compare the effects of market volatilities on Lysander Slater and BMO Laddered 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 Laddered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lysander Slater and BMO Laddered.
Diversification Opportunities for Lysander Slater and BMO Laddered
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lysander and BMO is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Lysander Slater Preferred Shar and BMO Laddered Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Laddered Preferred 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 Laddered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Laddered Preferred has no effect on the direction of Lysander Slater i.e., Lysander Slater and BMO Laddered go up and down completely randomly.
Pair Corralation between Lysander Slater and BMO Laddered
Assuming the 90 days horizon Lysander Slater is expected to generate 1.19 times less return on investment than BMO Laddered. But when comparing it to its historical volatility, Lysander Slater Preferred Share is 1.15 times less risky than BMO Laddered. It trades about 0.11 of its potential returns per unit of risk. BMO Laddered Preferred is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 997.00 in BMO Laddered Preferred on September 1, 2024 and sell it today you would earn a total of 70.00 from holding BMO Laddered Preferred or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lysander Slater Preferred Shar vs. BMO Laddered Preferred
Performance |
| Timeline |
| Lysander Slater Pref |
| BMO Laddered Preferred |
Lysander Slater and BMO Laddered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lysander Slater and BMO Laddered
The main advantage of trading using opposite Lysander Slater and BMO Laddered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lysander Slater position performs unexpectedly, BMO Laddered 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 Laddered will offset losses from the drop in BMO Laddered's long position.| Lysander Slater vs. BMO Covered Call | Lysander Slater vs. Forstrong Global Income | Lysander Slater vs. BMO Aggregate Bond | Lysander Slater vs. iShares Canadian HYBrid |
| BMO Laddered vs. iShares SPTSX Canadian | BMO Laddered vs. Global X Active | BMO Laddered vs. BMO Europe High | BMO Laddered vs. BMO Equal Weight |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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