Correlation Between BMO Tactical and Exemplar Growth

Can any of the company-specific risk be diversified away by investing in both BMO Tactical and Exemplar Growth 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 Tactical and Exemplar Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BMO Tactical Dividend and Exemplar Growth and, you can compare the effects of market volatilities on BMO Tactical and Exemplar Growth 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 Tactical with a short position of Exemplar Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMO Tactical and Exemplar Growth.

Diversification Opportunities for BMO Tactical and Exemplar Growth

-0.6

Correlation Coefficient

BMO Tactical  Exemplar Growth

Excellent diversification

The 3 months correlation between BMO and Exemplar is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BMO Tactical Dividend and Exemplar Growth and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exemplar Growth and BMO Tactical 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 Tactical Dividend are associated (or correlated) with Exemplar Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exemplar Growth has no effect on the direction of BMO Tactical i.e., BMO Tactical and Exemplar Growth go up and down completely randomly.

Pair Corralation between BMO Tactical and Exemplar Growth

Assuming the 90 days trading horizon BMO Tactical is expected to generate 2.41 times less return on investment than Exemplar Growth. In addition to that, BMO Tactical is 2.1 times more volatile than Exemplar Growth and. It trades about 0.03 of its total potential returns per unit of risk. Exemplar Growth and is currently generating about 0.15 per unit of volatility. If you would invest  1,970  in Exemplar Growth and on September 23, 2024 and sell it today you would earn a total of  293.00  from holding Exemplar Growth and or generate 14.87% return on investment over 90 days.

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

BMO Tactical Dividend  vs.  Exemplar Growth and

BMO Tactical Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BMO Tactical Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, BMO Tactical is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Exemplar Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exemplar Growth and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Exemplar Growth is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BMO Tactical and Exemplar Growth

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

The idea behind BMO Tactical Dividend and Exemplar Growth and 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.