Correlation Between BMO Aggregate and Petro Victory
Can any of the company-specific risk be diversified away by investing in both BMO Aggregate and Petro Victory 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 Petro Victory 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 Petro Victory Energy Corp, you can compare the effects of market volatilities on BMO Aggregate and Petro Victory 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 Petro Victory. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Petro Victory.
Diversification Opportunities for BMO Aggregate and Petro Victory
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between BMO and Petro is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Petro Victory Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petro Victory Energy 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 Petro Victory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petro Victory Energy has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Petro Victory go up and down completely randomly.
Pair Corralation between BMO Aggregate and Petro Victory
Assuming the 90 days trading horizon BMO Aggregate Bond is expected to generate 0.03 times more return on investment than Petro Victory. However, BMO Aggregate Bond is 33.93 times less risky than Petro Victory. It trades about 0.04 of its potential returns per unit of risk. Petro Victory Energy Corp is currently generating about -0.23 per unit of risk. If you would invest 2,983 in BMO Aggregate Bond on October 24, 2024 and sell it today you would earn a total of 7.00 from holding BMO Aggregate Bond or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Aggregate Bond vs. Petro Victory Energy Corp
Performance |
| Timeline |
| BMO Aggregate Bond |
| Petro Victory Energy |
BMO Aggregate and Petro Victory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and Petro Victory
The main advantage of trading using opposite BMO Aggregate and Petro Victory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Petro Victory 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 Petro Victory will offset losses from the drop in Petro Victory'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 |
| Petro Victory vs. Primaris Retail RE | Petro Victory vs. North American Construction | Petro Victory vs. Computer Modelling Group | Petro Victory vs. Solid Impact 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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