Correlation Between BMO Aggregate and CDSPI Canadian
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By analyzing existing cross correlation between BMO Aggregate Bond and CDSPI Canadian Equity, you can compare the effects of market volatilities on BMO Aggregate and CDSPI 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 CDSPI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and CDSPI Canadian.
Diversification Opportunities for BMO Aggregate and CDSPI Canadian
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BMO and CDSPI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and CDSPI Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDSPI 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 CDSPI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDSPI Canadian Equity has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and CDSPI Canadian go up and down completely randomly.
Pair Corralation between BMO Aggregate and CDSPI Canadian
Assuming the 90 days trading horizon BMO Aggregate is expected to generate 226.5 times less return on investment than CDSPI Canadian. But when comparing it to its historical volatility, BMO Aggregate Bond is 2.01 times less risky than CDSPI Canadian. It trades about 0.0 of its potential returns per unit of risk. CDSPI Canadian Equity is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,811 in CDSPI Canadian Equity on October 25, 2024 and sell it today you would earn a total of 82.00 from holding CDSPI Canadian Equity or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Aggregate Bond vs. CDSPI Canadian Equity
Performance |
| Timeline |
| BMO Aggregate Bond |
| CDSPI Canadian Equity |
BMO Aggregate and CDSPI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and CDSPI Canadian
The main advantage of trading using opposite BMO Aggregate and CDSPI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, CDSPI 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 CDSPI Canadian will offset losses from the drop in CDSPI 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 |
| CDSPI Canadian vs. CDSPI Common Stock | CDSPI Canadian vs. CDSPI Dividend | CDSPI Canadian vs. CDSPI Balanced Value | CDSPI Canadian vs. CDSPI SP 500 |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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