Correlation Between Bank of Montreal and Sustainable Power
Can any of the company-specific risk be diversified away by investing in both Bank of Montreal and Sustainable Power 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 Bank of Montreal and Sustainable Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Montreal and Sustainable Power Infrastructure, you can compare the effects of market volatilities on Bank of Montreal and Sustainable Power 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 Bank of Montreal with a short position of Sustainable Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Montreal and Sustainable Power.
Diversification Opportunities for Bank of Montreal and Sustainable Power
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Sustainable is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Montreal and Sustainable Power Infrastructu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sustainable Power and Bank of Montreal 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 Bank of Montreal are associated (or correlated) with Sustainable Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sustainable Power has no effect on the direction of Bank of Montreal i.e., Bank of Montreal and Sustainable Power go up and down completely randomly.
Pair Corralation between Bank of Montreal and Sustainable Power
Assuming the 90 days trading horizon Bank of Montreal is expected to generate 0.78 times more return on investment than Sustainable Power. However, Bank of Montreal is 1.29 times less risky than Sustainable Power. It trades about 0.11 of its potential returns per unit of risk. Sustainable Power Infrastructure is currently generating about 0.05 per unit of risk. If you would invest 16,270 in Bank of Montreal on August 27, 2025 and sell it today you would earn a total of 990.00 from holding Bank of Montreal or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Montreal vs. Sustainable Power Infrastructu
Performance |
| Timeline |
| Bank of Montreal |
| Sustainable Power |
Bank of Montreal and Sustainable Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Montreal and Sustainable Power
The main advantage of trading using opposite Bank of Montreal and Sustainable Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Montreal position performs unexpectedly, Sustainable Power 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 Sustainable Power will offset losses from the drop in Sustainable Power's long position.| Bank of Montreal vs. Element Fleet Management | Bank of Montreal vs. AGF Management Limited | Bank of Montreal vs. Nova Leap Health | Bank of Montreal vs. Gfl Environmental Holdings |
| Sustainable Power vs. Income Financial Trust | Sustainable Power vs. IGM Financial | Sustainable Power vs. Laurentian Bank | Sustainable Power vs. Titanium Transportation Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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