Correlation Between BMO Aggregate and Martina Minerals

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

Diversification Opportunities for BMO Aggregate and Martina Minerals

0.06

Correlation Coefficient

BMO Aggregate  Martina Minerals

Significant diversification

The 3 months correlation between BMO and Martina is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Martina Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martina Minerals Corp 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 Martina Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martina Minerals Corp has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Martina Minerals go up and down completely randomly.

Pair Corralation between BMO Aggregate and Martina Minerals

Assuming the 90 days trading horizon BMO Aggregate is expected to generate 149.62 times less return on investment than Martina Minerals. But when comparing it to its historical volatility, BMO Aggregate Bond is 97.96 times less risky than Martina Minerals. It trades about 0.1 of its potential returns per unit of risk. Martina Minerals Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2.50  in Martina Minerals Corp on December 23, 2024 and sell it today you would earn a total of  4.50  from holding Martina Minerals Corp or generate 180.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BMO Aggregate Bond  vs.  Martina Minerals Corp

BMO Aggregate Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BMO Aggregate Bond are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BMO Aggregate is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Martina Minerals Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Martina Minerals Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Martina Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BMO Aggregate and Martina Minerals

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

The idea behind BMO Aggregate Bond and Martina Minerals Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.