Correlation Between BMO SPTSX and Ether Fund
Can any of the company-specific risk be diversified away by investing in both BMO SPTSX and Ether Fund 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 SPTSX and Ether Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMO SPTSX Capped and Ether Fund, you can compare the effects of market volatilities on BMO SPTSX and Ether Fund 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 SPTSX with a short position of Ether Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO SPTSX and Ether Fund.
Diversification Opportunities for BMO SPTSX and Ether Fund
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BMO and Ether is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BMO SPTSX Capped and Ether Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ether Fund and BMO SPTSX 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 SPTSX Capped are associated (or correlated) with Ether Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ether Fund has no effect on the direction of BMO SPTSX i.e., BMO SPTSX and Ether Fund go up and down completely randomly.
Pair Corralation between BMO SPTSX and Ether Fund
Assuming the 90 days trading horizon BMO SPTSX is expected to generate 11.44 times less return on investment than Ether Fund. But when comparing it to its historical volatility, BMO SPTSX Capped is 24.37 times less risky than Ether Fund. It trades about 0.17 of its potential returns per unit of risk. Ether Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,155 in Ether Fund on September 25, 2024 and sell it today you would earn a total of 44.00 from holding Ether Fund or generate 0.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.19% |
Values | Daily Returns |
BMO SPTSX Capped vs. Ether Fund
Performance |
Timeline |
BMO SPTSX Capped |
Ether Fund |
BMO SPTSX and Ether Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BMO SPTSX and Ether Fund
The main advantage of trading using opposite BMO SPTSX and Ether Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMO SPTSX position performs unexpectedly, Ether Fund 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 Ether Fund will offset losses from the drop in Ether Fund's long position.BMO SPTSX vs. iShares Core MSCI | BMO SPTSX vs. Vanguard Total Market | BMO SPTSX vs. iShares Core SP | BMO SPTSX vs. BMO Aggregate Bond |
Ether Fund vs. Ether Fund | Ether Fund vs. Ether ETF CAD | Ether Fund vs. NBI High Yield | Ether Fund vs. NBI Unconstrained Fixed |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Fundamental Analysis View fundamental data based on most recent published financial statements |