Correlation Between BMO Aggregate and Fidelity Low

Can any of the company-specific risk be diversified away by investing in both BMO Aggregate and Fidelity Low 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 Fidelity Low 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 Fidelity Low Volatility, you can compare the effects of market volatilities on BMO Aggregate and Fidelity Low 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 Fidelity Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Aggregate and Fidelity Low.

Diversification Opportunities for BMO Aggregate and Fidelity Low

0.0

Correlation Coefficient

BMO Aggregate  Fidelity Low

Pay attention - limited upside

The 3 months correlation between BMO and Fidelity is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Fidelity Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Low Volatility 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 Fidelity Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Low Volatility has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Fidelity Low go up and down completely randomly.

Pair Corralation between BMO Aggregate and Fidelity Low

If you would invest (100.00) in Fidelity Low Volatility on October 6, 2024 and sell it today you would earn a total of  100.00  from holding Fidelity Low Volatility or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BMO Aggregate Bond  vs.  Fidelity Low Volatility

BMO Aggregate Bond

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BMO Aggregate Bond are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, BMO Aggregate is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Fidelity Low Volatility

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Fidelity Low Volatility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Fidelity Low is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BMO Aggregate and Fidelity Low

The main advantage of trading using opposite BMO Aggregate and Fidelity Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO Aggregate position performs unexpectedly, Fidelity Low 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 Fidelity Low will offset losses from the drop in Fidelity Low's long position.

The idea behind BMO Aggregate Bond and Fidelity Low Volatility pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.