Correlation Between Terreno Resources and BMO Aggregate

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Terreno Resources and BMO Aggregate 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 Terreno Resources and BMO Aggregate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terreno Resources Corp and BMO Aggregate Bond, you can compare the effects of market volatilities on Terreno Resources and BMO Aggregate 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 Terreno Resources with a short position of BMO Aggregate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terreno Resources and BMO Aggregate.

Diversification Opportunities for Terreno Resources and BMO Aggregate

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Terreno and BMO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Terreno Resources Corp and BMO Aggregate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMO Aggregate Bond and Terreno Resources 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 Terreno Resources Corp are associated (or correlated) with BMO Aggregate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMO Aggregate Bond has no effect on the direction of Terreno Resources i.e., Terreno Resources and BMO Aggregate go up and down completely randomly.

Pair Corralation between Terreno Resources and BMO Aggregate

Assuming the 90 days trading horizon Terreno Resources Corp is expected to generate 67.82 times more return on investment than BMO Aggregate. However, Terreno Resources is 67.82 times more volatile than BMO Aggregate Bond. It trades about 0.09 of its potential returns per unit of risk. BMO Aggregate Bond is currently generating about 0.07 per unit of risk. If you would invest  1.00  in Terreno Resources Corp on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Terreno Resources Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Terreno Resources Corp  vs.  BMO Aggregate Bond

 Performance 
       Timeline  
Terreno Resources Corp 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Terreno Resources Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Terreno Resources showed solid returns over the last few months and may actually be approaching a breakup point.
BMO Aggregate Bond 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BMO Aggregate Bond has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Terreno Resources and BMO Aggregate Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Terreno Resources and BMO Aggregate

The main advantage of trading using opposite Terreno Resources and BMO Aggregate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terreno Resources position performs unexpectedly, BMO Aggregate 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 Aggregate will offset losses from the drop in BMO Aggregate's long position.
The idea behind Terreno Resources Corp and BMO Aggregate Bond 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.
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum