Correlation Between CI Gold and BMO Put
Can any of the company-specific risk be diversified away by investing in both CI Gold and BMO Put 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 CI Gold and BMO Put into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Gold Giants and BMO Put Write, you can compare the effects of market volatilities on CI Gold and BMO Put 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 CI Gold with a short position of BMO Put. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Gold and BMO Put.
Diversification Opportunities for CI Gold and BMO Put
Very weak diversification
The 3 months correlation between CGXF and BMO is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Giants and BMO Put Write in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Put Write and CI Gold 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 CI Gold Giants are associated (or correlated) with BMO Put. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Put Write has no effect on the direction of CI Gold i.e., CI Gold and BMO Put go up and down completely randomly.
Pair Corralation between CI Gold and BMO Put
Assuming the 90 days trading horizon CI Gold Giants is expected to generate 3.49 times more return on investment than BMO Put. However, CI Gold is 3.49 times more volatile than BMO Put Write. It trades about 0.13 of its potential returns per unit of risk. BMO Put Write is currently generating about -0.05 per unit of risk. If you would invest 1,056 in CI Gold Giants on December 1, 2024 and sell it today you would earn a total of 129.00 from holding CI Gold Giants or generate 12.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CI Gold Giants vs. BMO Put Write
Performance |
Timeline |
CI Gold Giants |
BMO Put Write |
CI Gold and BMO Put Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CI Gold and BMO Put
The main advantage of trading using opposite CI Gold and BMO Put positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Gold position performs unexpectedly, BMO Put 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 Put will offset losses from the drop in BMO Put's long position.CI Gold vs. First Asset Energy | CI Gold vs. First Asset Tech | CI Gold vs. Harvest Equal Weight | CI Gold vs. CI Canada Lifeco |
BMO Put vs. BMO Put Write | BMO Put vs. BMO Global High | BMO Put vs. Harvest Equal Weight | BMO Put vs. CI Gold Giants |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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