Correlation Between BMO NASDAQ and Mackenzie Large
Can any of the company-specific risk be diversified away by investing in both BMO NASDAQ and Mackenzie Large 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 NASDAQ and Mackenzie Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO NASDAQ 100 and Mackenzie Large Cap, you can compare the effects of market volatilities on BMO NASDAQ and Mackenzie Large 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 NASDAQ with a short position of Mackenzie Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO NASDAQ and Mackenzie Large.
Diversification Opportunities for BMO NASDAQ and Mackenzie Large
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BMO and Mackenzie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding BMO NASDAQ 100 and Mackenzie Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Large Cap and BMO NASDAQ 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 NASDAQ 100 are associated (or correlated) with Mackenzie Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Large Cap has no effect on the direction of BMO NASDAQ i.e., BMO NASDAQ and Mackenzie Large go up and down completely randomly.
Pair Corralation between BMO NASDAQ and Mackenzie Large
Assuming the 90 days trading horizon BMO NASDAQ is expected to generate 1.08 times less return on investment than Mackenzie Large. In addition to that, BMO NASDAQ is 1.47 times more volatile than Mackenzie Large Cap. It trades about 0.1 of its total potential returns per unit of risk. Mackenzie Large Cap is currently generating about 0.16 per unit of volatility. If you would invest 15,009 in Mackenzie Large Cap on September 4, 2024 and sell it today you would earn a total of 5,000 from holding Mackenzie Large Cap or generate 33.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
BMO NASDAQ 100 vs. Mackenzie Large Cap
Performance |
| Timeline |
| BMO NASDAQ 100 |
| Mackenzie Large Cap |
BMO NASDAQ and Mackenzie Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO NASDAQ and Mackenzie Large
The main advantage of trading using opposite BMO NASDAQ and Mackenzie Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO NASDAQ position performs unexpectedly, Mackenzie Large 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 Mackenzie Large will offset losses from the drop in Mackenzie Large's long position.| BMO NASDAQ vs. BMO SP 500 | BMO NASDAQ vs. iShares NASDAQ 100 | BMO NASDAQ vs. BMO SPTSX Equal | BMO NASDAQ vs. iShares SPTSX Capped |
| Mackenzie Large vs. Mackenzie Developed ex North | Mackenzie Large vs. Mackenzie Global Sustainable | Mackenzie Large vs. Mackenzie Aggregate Bond | Mackenzie Large vs. Mackenzie Canadian Ultra |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |