Correlation Between BMO Aggregate and Accelerate OneChoice
Can any of the company-specific risk be diversified away by investing in both BMO Aggregate and Accelerate OneChoice at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BMO Aggregate and Accelerate OneChoice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO Aggregate Bond and Accelerate OneChoice Alternative, you can compare the effects of market volatilities on BMO Aggregate and Accelerate OneChoice 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 Accelerate OneChoice. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Accelerate OneChoice.
Diversification Opportunities for BMO Aggregate and Accelerate OneChoice
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BMO and Accelerate is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Accelerate OneChoice Alternati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate OneChoice 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 Accelerate OneChoice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate OneChoice has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Accelerate OneChoice go up and down completely randomly.
Pair Corralation between BMO Aggregate and Accelerate OneChoice
Assuming the 90 days trading horizon BMO Aggregate is expected to generate 3.72 times less return on investment than Accelerate OneChoice. But when comparing it to its historical volatility, BMO Aggregate Bond is 1.74 times less risky than Accelerate OneChoice. It trades about 0.13 of its potential returns per unit of risk. Accelerate OneChoice Alternative is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,288 in Accelerate OneChoice Alternative on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Accelerate OneChoice Alternative or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Aggregate Bond vs. Accelerate OneChoice Alternati
Performance |
| Timeline |
| BMO Aggregate Bond |
| Accelerate OneChoice |
BMO Aggregate and Accelerate OneChoice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and Accelerate OneChoice
The main advantage of trading using opposite BMO Aggregate and Accelerate OneChoice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Accelerate OneChoice 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 Accelerate OneChoice will offset losses from the drop in Accelerate OneChoice'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 |
| Accelerate OneChoice vs. NBI Liquid Alternatives | Accelerate OneChoice vs. BMO Aggregate Bond | Accelerate OneChoice vs. iShares Canadian HYBrid | Accelerate OneChoice 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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