Correlation Between BMO Aggregate and Mawer Global
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By analyzing existing cross correlation between BMO Aggregate Bond and Mawer Global Small, you can compare the effects of market volatilities on BMO Aggregate and Mawer Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Mawer Global.
Diversification Opportunities for BMO Aggregate and Mawer Global
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BMO and Mawer is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Mawer Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Global Small 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Global Small has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Mawer Global go up and down completely randomly.
Pair Corralation between BMO Aggregate and Mawer Global
Assuming the 90 days trading horizon BMO Aggregate Bond is expected to generate 0.44 times more return on investment than Mawer Global. However, BMO Aggregate Bond is 2.26 times less risky than Mawer Global. It trades about 0.14 of its potential returns per unit of risk. Mawer Global Small is currently generating about -0.01 per unit of risk. If you would invest 2,996 in BMO Aggregate Bond on November 27, 2024 and sell it today you would earn a total of 23.00 from holding BMO Aggregate Bond or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Aggregate Bond vs. Mawer Global Small
Performance |
| Timeline |
| BMO Aggregate Bond |
| Mawer Global Small |
BMO Aggregate and Mawer Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and Mawer Global
The main advantage of trading using opposite BMO Aggregate and Mawer Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Mawer Global 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 Global will offset losses from the drop in Mawer Global'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 Global vs. Fidelity Small Cap | Mawer Global vs. Fidelity Tactical High | Mawer Global vs. Fidelity ClearPath 2045 | Mawer Global vs. Bloom Select Income |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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