Correlation Between BMO Aggregate and Fidelity Advantage
Can any of the company-specific risk be diversified away by investing in both BMO Aggregate and Fidelity Advantage 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 BMO Aggregate and Fidelity Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO Aggregate Bond and Fidelity Advantage Bitcoin, you can compare the effects of market volatilities on BMO Aggregate and Fidelity Advantage 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 BMO Aggregate with a short position of Fidelity Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Fidelity Advantage.
Diversification Opportunities for BMO Aggregate and Fidelity Advantage
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BMO and Fidelity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Fidelity Advantage Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advantage and BMO Aggregate 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 BMO Aggregate Bond are associated (or correlated) with Fidelity Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advantage has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Fidelity Advantage go up and down completely randomly.
Pair Corralation between BMO Aggregate and Fidelity Advantage
Assuming the 90 days trading horizon BMO Aggregate Bond is expected to under-perform the Fidelity Advantage. But the etf apears to be less risky and, when comparing its historical volatility, BMO Aggregate Bond is 13.31 times less risky than Fidelity Advantage. The etf trades about -0.11 of its potential returns per unit of risk. The Fidelity Advantage Bitcoin is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 3,135 in Fidelity Advantage Bitcoin on August 25, 2024 and sell it today you would earn a total of 1,463 from holding Fidelity Advantage Bitcoin or generate 46.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Aggregate Bond vs. Fidelity Advantage Bitcoin
Performance |
| Timeline |
| BMO Aggregate Bond |
| Fidelity Advantage |
BMO Aggregate and Fidelity Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and Fidelity Advantage
The main advantage of trading using opposite BMO Aggregate and Fidelity Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Fidelity Advantage 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 Fidelity Advantage will offset losses from the drop in Fidelity Advantage's long position.| BMO Aggregate vs. Mackenzie Core Plus | BMO Aggregate vs. Mackenzie Unconstrained Bond | BMO Aggregate vs. Mackenzie Floating Rate | BMO Aggregate vs. Mackenzie Canadian Aggregate |
| Fidelity Advantage vs. Fidelity Global Value | Fidelity Advantage vs. Fidelity Momentum ETF | Fidelity Advantage vs. Fidelity Canadian High | Fidelity Advantage vs. Fidelity All in One Balanced |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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