Correlation Between BMO Laddered and Lysander Slater
Can any of the company-specific risk be diversified away by investing in both BMO Laddered and Lysander Slater 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 Lysander Slater 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 Lysander Slater Preferred Share, you can compare the effects of market volatilities on BMO Laddered and Lysander Slater 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 Lysander Slater. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Laddered and Lysander Slater.
Diversification Opportunities for BMO Laddered and Lysander Slater
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BMO and Lysander is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BMO Laddered Preferred and Lysander Slater Preferred Shar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysander Slater Pref 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 Lysander Slater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysander Slater Pref has no effect on the direction of BMO Laddered i.e., BMO Laddered and Lysander Slater go up and down completely randomly.
Pair Corralation between BMO Laddered and Lysander Slater
Assuming the 90 days trading horizon BMO Laddered Preferred is expected to generate 1.15 times more return on investment than Lysander Slater. However, BMO Laddered is 1.15 times more volatile than Lysander Slater Preferred Share. It trades about 0.11 of its potential returns per unit of risk. Lysander Slater Preferred Share is currently generating about 0.11 per unit of risk. 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 |
BMO Laddered Preferred vs. Lysander Slater Preferred Shar
Performance |
| Timeline |
| BMO Laddered Preferred |
| Lysander Slater Pref |
BMO Laddered and Lysander Slater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Laddered and Lysander Slater
The main advantage of trading using opposite BMO Laddered and Lysander Slater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Laddered position performs unexpectedly, Lysander Slater 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 Lysander Slater will offset losses from the drop in Lysander Slater'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 |
| Lysander Slater vs. BMO Covered Call | Lysander Slater vs. Forstrong Global Income | Lysander Slater vs. BMO Aggregate Bond | Lysander Slater vs. iShares Canadian HYBrid |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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