Correlation Between BetaPro NASDAQ and BMO Short
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and BMO Short 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 BetaPro NASDAQ and BMO Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro NASDAQ 100 2x and BMO Short Federal, you can compare the effects of market volatilities on BetaPro NASDAQ and BMO Short 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 BetaPro NASDAQ with a short position of BMO Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and BMO Short.
Diversification Opportunities for BetaPro NASDAQ and BMO Short
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and BMO is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and BMO Short Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Short Federal and BetaPro NASDAQ 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 BetaPro NASDAQ 100 2x are associated (or correlated) with BMO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Short Federal has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and BMO Short go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and BMO Short
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 83.27 times more return on investment than BMO Short. However, BetaPro NASDAQ is 83.27 times more volatile than BMO Short Federal. It trades about 0.03 of its potential returns per unit of risk. BMO Short Federal is currently generating about 0.08 per unit of risk. If you would invest 673.00 in BetaPro NASDAQ 100 2x on October 24, 2024 and sell it today you would earn a total of 332.00 from holding BetaPro NASDAQ 100 2x or generate 49.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. BMO Short Federal
Performance |
Timeline |
BetaPro NASDAQ 100 |
BMO Short Federal |
BetaPro NASDAQ and BMO Short Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BetaPro NASDAQ and BMO Short
The main advantage of trading using opposite BetaPro NASDAQ and BMO Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, BMO Short 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 Short will offset losses from the drop in BMO Short's long position.BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
BMO Short vs. BMO Short Term Bond | BMO Short vs. BMO Canadian Bank | BMO Short vs. BMO Aggregate Bond | BMO Short vs. BMO Balanced ETF |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |