Correlation Between BMO Equal and Hamilton Technology
Can any of the company-specific risk be diversified away by investing in both BMO Equal and Hamilton Technology 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 Equal and Hamilton Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO Equal Weight and Hamilton Technology Yield, you can compare the effects of market volatilities on BMO Equal and Hamilton Technology 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 Equal with a short position of Hamilton Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Equal and Hamilton Technology.
Diversification Opportunities for BMO Equal and Hamilton Technology
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BMO and Hamilton is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BMO Equal Weight and Hamilton Technology Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Technology Yield and BMO Equal 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 Equal Weight are associated (or correlated) with Hamilton Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Technology Yield has no effect on the direction of BMO Equal i.e., BMO Equal and Hamilton Technology go up and down completely randomly.
Pair Corralation between BMO Equal and Hamilton Technology
Assuming the 90 days trading horizon BMO Equal Weight is expected to generate 0.44 times more return on investment than Hamilton Technology. However, BMO Equal Weight is 2.26 times less risky than Hamilton Technology. It trades about 0.31 of its potential returns per unit of risk. Hamilton Technology Yield is currently generating about 0.02 per unit of risk. If you would invest 6,664 in BMO Equal Weight on November 4, 2024 and sell it today you would earn a total of 346.00 from holding BMO Equal Weight or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Equal Weight vs. Hamilton Technology Yield
Performance |
| Timeline |
| BMO Equal Weight |
| Hamilton Technology Yield |
BMO Equal and Hamilton Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Equal and Hamilton Technology
The main advantage of trading using opposite BMO Equal and Hamilton Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Equal position performs unexpectedly, Hamilton Technology 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 Hamilton Technology will offset losses from the drop in Hamilton Technology's long position.| BMO Equal vs. BMO Equal Weight | BMO Equal vs. BMO Global Infrastructure | BMO Equal vs. iShares Global Healthcare | BMO Equal vs. BMO Low Volatility |
| Hamilton Technology vs. Hamilton Equity YIELD | Hamilton Technology vs. Hamilton Enhanced Canadian | Hamilton Technology vs. Hamilton Australian Bank | Hamilton Technology vs. Hamilton MidSmall Cap Financials |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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