Correlation Between BMO Aggregate and BMO Aggregate
Can any of the company-specific risk be diversified away by investing in both BMO Aggregate and BMO Aggregate 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 BMO Aggregate 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 BMO Aggregate Bond, you can compare the effects of market volatilities on BMO Aggregate and BMO Aggregate 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 BMO Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and BMO Aggregate.
Diversification Opportunities for BMO Aggregate and BMO Aggregate
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BMO and BMO is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and BMO Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Aggregate Bond 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 BMO Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Aggregate Bond has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and BMO Aggregate go up and down completely randomly.
Pair Corralation between BMO Aggregate and BMO Aggregate
Assuming the 90 days trading horizon BMO Aggregate is expected to generate 3.22 times less return on investment than BMO Aggregate. But when comparing it to its historical volatility, BMO Aggregate Bond is 1.15 times less risky than BMO Aggregate. It trades about 0.02 of its potential returns per unit of risk. BMO Aggregate Bond is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,271 in BMO Aggregate Bond on August 31, 2024 and sell it today you would earn a total of 120.00 from holding BMO Aggregate Bond or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
BMO Aggregate Bond vs. BMO Aggregate Bond
Performance |
| Timeline |
| BMO Aggregate Bond |
| BMO Aggregate Bond |
BMO Aggregate and BMO Aggregate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Aggregate and BMO Aggregate
The main advantage of trading using opposite BMO Aggregate and BMO Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, BMO Aggregate 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 BMO Aggregate will offset losses from the drop in BMO Aggregate'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 |
| BMO Aggregate vs. iShares Core MSCI | BMO Aggregate vs. Vanguard FTSE Canada | BMO Aggregate vs. Vanguard Canadian Aggregate | BMO Aggregate vs. iShares Core MSCI |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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