Correlation Between BMO Covered and CI Europe
Can any of the company-specific risk be diversified away by investing in both BMO Covered and CI Europe 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 Covered and CI Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO Covered Call and CI Europe Hedged, you can compare the effects of market volatilities on BMO Covered and CI Europe 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 Covered with a short position of CI Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Covered and CI Europe.
Diversification Opportunities for BMO Covered and CI Europe
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BMO and EHE is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding BMO Covered Call and CI Europe Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Europe Hedged and BMO Covered 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 Covered Call are associated (or correlated) with CI Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Europe Hedged has no effect on the direction of BMO Covered i.e., BMO Covered and CI Europe go up and down completely randomly.
Pair Corralation between BMO Covered and CI Europe
Assuming the 90 days trading horizon BMO Covered Call is expected to generate 1.89 times more return on investment than CI Europe. However, BMO Covered is 1.89 times more volatile than CI Europe Hedged. It trades about 0.04 of its potential returns per unit of risk. CI Europe Hedged is currently generating about 0.06 per unit of risk. If you would invest 2,096 in BMO Covered Call on August 29, 2024 and sell it today you would earn a total of 552.00 from holding BMO Covered Call or generate 26.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMO Covered Call vs. CI Europe Hedged
Performance |
| Timeline |
| BMO Covered Call |
| CI Europe Hedged |
BMO Covered and CI Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMO Covered and CI Europe
The main advantage of trading using opposite BMO Covered and CI Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Covered position performs unexpectedly, CI Europe 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 CI Europe will offset losses from the drop in CI Europe's long position.| BMO Covered vs. Brompton Global Dividend | BMO Covered vs. Tech Leaders Income | BMO Covered vs. Global Healthcare Income | BMO Covered vs. Brompton European Dividend |
| CI Europe vs. BMO Europe High | CI Europe vs. BMO High Dividend | CI Europe vs. BMO Covered Call | CI Europe vs. BMO Premium Yield |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |