Correlation Between BMO Aggregate and Harvest Tech
Can any of the company-specific risk be diversified away by investing in both BMO Aggregate and Harvest Tech 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 Harvest Tech 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 Harvest Tech Achievers, you can compare the effects of market volatilities on BMO Aggregate and Harvest Tech 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 Harvest Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Harvest Tech.
Diversification Opportunities for BMO Aggregate and Harvest Tech
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BMO and Harvest is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Harvest Tech Achievers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Tech Achievers 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 Harvest Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Tech Achievers has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Harvest Tech go up and down completely randomly.
Pair Corralation between BMO Aggregate and Harvest Tech
Assuming the 90 days trading horizon BMO Aggregate is expected to generate 2.41 times less return on investment than Harvest Tech. But when comparing it to its historical volatility, BMO Aggregate Bond is 3.7 times less risky than Harvest Tech. It trades about 0.13 of its potential returns per unit of risk. Harvest Tech Achievers is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,693 in Harvest Tech Achievers on August 31, 2024 and sell it today you would earn a total of 227.00 from holding Harvest Tech Achievers or generate 13.41% 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. Harvest Tech Achievers
Performance |
| Timeline |
| BMO Aggregate Bond |
| Harvest Tech Achievers |
BMO Aggregate and Harvest Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and Harvest Tech
The main advantage of trading using opposite BMO Aggregate and Harvest Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Harvest Tech 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 Harvest Tech will offset losses from the drop in Harvest Tech's long position.| BMO Aggregate vs. iShares Core MSCI | BMO Aggregate vs. Vanguard FTSE Canada | BMO Aggregate vs. Vanguard Canadian Aggregate | BMO Aggregate vs. iShares Core MSCI |
| Harvest Tech vs. iShares Canadian HYBrid | Harvest Tech vs. Brompton European Dividend | Harvest Tech vs. Solar Alliance Energy | Harvest Tech vs. PHN Multi Style All Cap |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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