Correlation Between BMO Aggregate and Taseko Mines

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

Diversification Opportunities for BMO Aggregate and Taseko Mines

0.47

Correlation Coefficient

BMO Aggregate  Taseko Mines

Very weak diversification

The 3 months correlation between BMO and Taseko is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BMO Aggregate Bond and Taseko Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taseko Mines 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 Taseko Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taseko Mines has no effect on the direction of BMO Aggregate i.e., BMO Aggregate and Taseko Mines go up and down completely randomly.

Pair Corralation between BMO Aggregate and Taseko Mines

Assuming the 90 days trading horizon BMO Aggregate is expected to generate 10.64 times less return on investment than Taseko Mines. But when comparing it to its historical volatility, BMO Aggregate Bond is 10.93 times less risky than Taseko Mines. It trades about 0.1 of its potential returns per unit of risk. Taseko Mines is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  289.00  in Taseko Mines on December 22, 2024 and sell it today you would earn a total of  55.00  from holding Taseko Mines or generate 19.03% return on investment over 90 days.

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

BMO Aggregate Bond  vs.  Taseko Mines

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.

Taseko Mines

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taseko Mines are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Taseko Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BMO Aggregate and Taseko Mines

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

The idea behind BMO Aggregate Bond and Taseko Mines 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.