Correlation Between BMO Laddered and CI Preferred
Can any of the company-specific risk be diversified away by investing in both BMO Laddered and CI 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 BMO Laddered and CI Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO Laddered Preferred and CI Preferred Share, you can compare the effects of market volatilities on BMO Laddered and CI 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 BMO Laddered with a short position of CI Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Laddered and CI Preferred.
Diversification Opportunities for BMO Laddered and CI Preferred
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BMO and FPR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BMO Laddered Preferred and CI Preferred Share in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Preferred Share and BMO Laddered 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 Laddered Preferred are associated (or correlated) with CI Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Preferred Share has no effect on the direction of BMO Laddered i.e., BMO Laddered and CI Preferred go up and down completely randomly.
Pair Corralation between BMO Laddered and CI Preferred
Assuming the 90 days trading horizon BMO Laddered Preferred is expected to generate 1.03 times more return on investment than CI Preferred. However, BMO Laddered is 1.03 times more volatile than CI Preferred Share. It trades about 0.2 of its potential returns per unit of risk. CI Preferred Share is currently generating about 0.17 per unit of risk. If you would invest 850.00 in BMO Laddered Preferred on September 4, 2024 and sell it today you would earn a total of 212.00 from holding BMO Laddered Preferred or generate 24.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Laddered Preferred vs. CI Preferred Share
Performance |
| Timeline |
| BMO Laddered Preferred |
| CI Preferred Share |
BMO Laddered and CI Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Laddered and CI Preferred
The main advantage of trading using opposite BMO Laddered and CI Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Laddered position performs unexpectedly, CI 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 CI Preferred will offset losses from the drop in CI Preferred's long position.| BMO Laddered vs. iShares SPTSX Canadian | BMO Laddered vs. Global X Active | BMO Laddered vs. BMO Europe High | BMO Laddered vs. BMO Equal Weight |
| CI Preferred vs. BMO Laddered Preferred | CI Preferred vs. iShares SPTSX Canadian | CI Preferred vs. RBC Quant Canadian |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |