Correlation Between BMO Aggregate and RBC Canadian
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By analyzing existing cross correlation between BMO Aggregate Bond and RBC Canadian Equity, you can compare the effects of market volatilities on BMO Aggregate and RBC Canadian 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 RBC Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and RBC Canadian.
Diversification Opportunities for BMO Aggregate and RBC Canadian
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BMO and RBC is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and RBC Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Canadian Equity 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 RBC Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Canadian Equity has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and RBC Canadian go up and down completely randomly.
Pair Corralation between BMO Aggregate and RBC Canadian
Assuming the 90 days trading horizon BMO Aggregate is expected to generate 37.6 times less return on investment than RBC Canadian. But when comparing it to its historical volatility, BMO Aggregate Bond is 1.98 times less risky than RBC Canadian. It trades about 0.0 of its potential returns per unit of risk. RBC Canadian Equity is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,534 in RBC Canadian Equity on August 26, 2024 and sell it today you would earn a total of 594.00 from holding RBC Canadian Equity or generate 23.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
BMO Aggregate Bond vs. RBC Canadian Equity
Performance |
| Timeline |
| BMO Aggregate Bond |
| RBC Canadian Equity |
BMO Aggregate and RBC Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and RBC Canadian
The main advantage of trading using opposite BMO Aggregate and RBC Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, RBC Canadian 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 RBC Canadian will offset losses from the drop in RBC Canadian's long position.| BMO Aggregate vs. BMO Short Term Bond | BMO Aggregate vs. BMO Canadian Bank | BMO Aggregate vs. BMO Aggregate Bond | BMO Aggregate vs. BMO Balanced ETF |
| RBC Canadian vs. PHN Canadian Equity | RBC Canadian vs. BMO Aggregate Bond | RBC Canadian vs. iShares Canadian HYBrid | RBC Canadian vs. Brompton European Dividend |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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