Correlation Between BMO Aggregate and Mawer Canadien
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By analyzing existing cross correlation between BMO Aggregate Bond and Mawer Canadien obligations, you can compare the effects of market volatilities on BMO Aggregate and Mawer Canadien 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 Mawer Canadien. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Mawer Canadien.
Diversification Opportunities for BMO Aggregate and Mawer Canadien
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BMO and Mawer is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Mawer Canadien obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Canadien oblig 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 Mawer Canadien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Canadien oblig has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Mawer Canadien go up and down completely randomly.
Pair Corralation between BMO Aggregate and Mawer Canadien
Assuming the 90 days trading horizon BMO Aggregate is expected to generate 1.08 times less return on investment than Mawer Canadien. But when comparing it to its historical volatility, BMO Aggregate Bond is 1.05 times less risky than Mawer Canadien. It trades about 0.05 of its potential returns per unit of risk. Mawer Canadien obligations is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,128 in Mawer Canadien obligations on August 26, 2024 and sell it today you would earn a total of 26.00 from holding Mawer Canadien obligations or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Aggregate Bond vs. Mawer Canadien obligations
Performance |
| Timeline |
| BMO Aggregate Bond |
| Mawer Canadien oblig |
BMO Aggregate and Mawer Canadien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and Mawer Canadien
The main advantage of trading using opposite BMO Aggregate and Mawer Canadien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Mawer Canadien 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 Mawer Canadien will offset losses from the drop in Mawer Canadien'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 |
| Mawer Canadien vs. BMO Aggregate Bond | Mawer Canadien vs. iShares Canadian HYBrid | Mawer Canadien vs. Brompton European Dividend | Mawer Canadien vs. Solar Alliance Energy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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