Correlation Between BMO Aggregate and Enbridge Pref
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By analyzing existing cross correlation between BMO Aggregate Bond and Enbridge Pref 13, you can compare the effects of market volatilities on BMO Aggregate and Enbridge Pref 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 Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Enbridge Pref.
Diversification Opportunities for BMO Aggregate and Enbridge Pref
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BMO and Enbridge is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Enbridge Pref 13 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 13 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 Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 13 has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Enbridge Pref go up and down completely randomly.
Pair Corralation between BMO Aggregate and Enbridge Pref
Assuming the 90 days trading horizon BMO Aggregate Bond is expected to generate 1.23 times more return on investment than Enbridge Pref. However, BMO Aggregate is 1.23 times more volatile than Enbridge Pref 13. It trades about 0.08 of its potential returns per unit of risk. Enbridge Pref 13 is currently generating about -0.14 per unit of risk. If you would invest 3,009 in BMO Aggregate Bond on December 10, 2024 and sell it today you would earn a total of 22.00 from holding BMO Aggregate Bond or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Aggregate Bond vs. Enbridge Pref 13
Performance |
| Timeline |
| BMO Aggregate Bond |
| Enbridge Pref 13 |
BMO Aggregate and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and Enbridge Pref
The main advantage of trading using opposite BMO Aggregate and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref'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 |
| Enbridge Pref vs. Maple Leaf Foods | Enbridge Pref vs. Plantify Foods | Enbridge Pref vs. Canlan Ice Sports | Enbridge Pref vs. CNJ Capital Investments |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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