Correlation Between BetaPro NASDAQ and BMO MSCI
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and BMO MSCI 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 NASDAQ and BMO MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro NASDAQ 100 2x and BMO MSCI EAFE, you can compare the effects of market volatilities on BetaPro NASDAQ and BMO MSCI 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 NASDAQ with a short position of BMO MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and BMO MSCI.
Diversification Opportunities for BetaPro NASDAQ and BMO MSCI
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BetaPro and BMO is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and BMO MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO MSCI EAFE and BetaPro NASDAQ 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 NASDAQ 100 2x are associated (or correlated) with BMO MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO MSCI EAFE has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and BMO MSCI go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and BMO MSCI
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the BMO MSCI. In addition to that, BetaPro NASDAQ is 3.08 times more volatile than BMO MSCI EAFE. It trades about -0.11 of its total potential returns per unit of risk. BMO MSCI EAFE is currently generating about 0.15 per unit of volatility. If you would invest 3,233 in BMO MSCI EAFE on September 2, 2025 and sell it today you would earn a total of 222.00 from holding BMO MSCI EAFE or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. BMO MSCI EAFE
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| BMO MSCI EAFE |
BetaPro NASDAQ and BMO MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and BMO MSCI
The main advantage of trading using opposite BetaPro NASDAQ and BMO MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, BMO MSCI 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 MSCI will offset losses from the drop in BMO MSCI's long position.| BetaPro NASDAQ vs. BetaPro SPTSX 60 | BetaPro NASDAQ vs. BetaPro Gold Bullion | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SP 500 |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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