Correlation Between BetaPro SPTSX and BMO SPDR
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and BMO SPDR 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 BetaPro SPTSX and BMO SPDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SPTSX Capped and BMO SPDR Consumer, you can compare the effects of market volatilities on BetaPro SPTSX and BMO SPDR 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 BetaPro SPTSX with a short position of BMO SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and BMO SPDR.
Diversification Opportunities for BetaPro SPTSX and BMO SPDR
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BetaPro and BMO is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX Capped and BMO SPDR Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO SPDR Consumer and BetaPro 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 BetaPro SPTSX Capped are associated (or correlated) with BMO SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO SPDR Consumer has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and BMO SPDR go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and BMO SPDR
Assuming the 90 days trading horizon BetaPro SPTSX Capped is expected to under-perform the BMO SPDR. In addition to that, BetaPro SPTSX is 1.99 times more volatile than BMO SPDR Consumer. It trades about -0.05 of its total potential returns per unit of risk. BMO SPDR Consumer is currently generating about 0.02 per unit of volatility. If you would invest 2,975 in BMO SPDR Consumer on September 11, 2025 and sell it today you would earn a total of 103.00 from holding BMO SPDR Consumer or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.48% |
| Values | Daily Returns |
BetaPro SPTSX Capped vs. BMO SPDR Consumer
Performance |
| Timeline |
| BetaPro SPTSX Capped |
| BMO SPDR Consumer |
BetaPro SPTSX and BMO SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SPTSX and BMO SPDR
The main advantage of trading using opposite BetaPro SPTSX and BMO SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX position performs unexpectedly, BMO SPDR 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 BMO SPDR will offset losses from the drop in BMO SPDR's long position.The idea behind BetaPro SPTSX Capped and BMO SPDR Consumer 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.| BMO SPDR vs. BMO Short Term Bond | BMO SPDR vs. BMO Canadian Bank | BMO SPDR vs. BMO Target 2027 | BMO SPDR vs. BMO SPDR Real |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |