Correlation Between BMO Long and Inspire Global
Can any of the company-specific risk be diversified away by investing in both BMO Long and Inspire Global 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 Long and Inspire Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO Long Federal and Inspire Global Hope, you can compare the effects of market volatilities on BMO Long and Inspire Global 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 Long with a short position of Inspire Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Long and Inspire Global.
Diversification Opportunities for BMO Long and Inspire Global
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between BMO and Inspire is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding BMO Long Federal and Inspire Global Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Global Hope and BMO Long 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 Long Federal are associated (or correlated) with Inspire Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Global Hope has no effect on the direction of BMO Long i.e., BMO Long and Inspire Global go up and down completely randomly.
Pair Corralation between BMO Long and Inspire Global
Assuming the 90 days trading horizon BMO Long is expected to generate 90.33 times less return on investment than Inspire Global. In addition to that, BMO Long is 1.14 times more volatile than Inspire Global Hope. It trades about 0.0 of its total potential returns per unit of risk. Inspire Global Hope is currently generating about 0.06 per unit of volatility. If you would invest 3,045 in Inspire Global Hope on August 30, 2024 and sell it today you would earn a total of 862.00 from holding Inspire Global Hope or generate 28.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
BMO Long Federal vs. Inspire Global Hope
Performance |
| Timeline |
| BMO Long Federal |
| Inspire Global Hope |
BMO Long and Inspire Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Long and Inspire Global
The main advantage of trading using opposite BMO Long and Inspire Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Long position performs unexpectedly, Inspire Global 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 Inspire Global will offset losses from the drop in Inspire Global's long position.| BMO Long vs. iShares MSCI Emerging | BMO Long vs. iShares MSCI Global | BMO Long vs. iShares Core Canadian | BMO Long vs. Vanguard Total Market |
| Inspire Global vs. Mackenzie Canadian Equity | Inspire Global vs. Mackenzie Large Cap | Inspire Global vs. BMO MSCI EAFE | Inspire Global vs. BMO Long Federal |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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