Correlation Between BMO Global and CIBC Global

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

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

Diversification Opportunities for BMO Global and CIBC Global

0.52

Correlation Coefficient

BMO Global  CIBC Global

Very weak diversification

The 3 months correlation between BMO and CIBC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding BMO Global Consumer and CIBC Global Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBC Global Growth and BMO Global 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 Global Consumer are associated (or correlated) with CIBC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBC Global Growth has no effect on the direction of BMO Global i.e., BMO Global and CIBC Global go up and down completely randomly.

Pair Corralation between BMO Global and CIBC Global

Assuming the 90 days trading horizon BMO Global Consumer is expected to generate 0.85 times more return on investment than CIBC Global. However, BMO Global Consumer is 1.18 times less risky than CIBC Global. It trades about 0.2 of its potential returns per unit of risk. CIBC Global Growth is currently generating about 0.14 per unit of risk. If you would invest  4,019  in BMO Global Consumer on April 24, 2025 and sell it today you would earn a total of  387.00  from holding BMO Global Consumer or generate 9.63% return on investment over 90 days.

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

BMO Global Consumer  vs.  CIBC Global Growth

BMO Global Consumer

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BMO Global Consumer are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BMO Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

CIBC Global Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CIBC Global Growth are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, CIBC Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BMO Global and CIBC Global

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

The idea behind BMO Global Consumer and CIBC Global Growth 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.