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Will Bank Of Montreal (NYSE:BMO) volatility rise before September
 | By Vlad Skutelnik | Macroaxis Story |
It seems Bank Of Montreal will continue to recover much faster as its share price surged up 1.69% today. The company's current daily volatility is 2.38 percent, with a beta of -0.42 and an alpha of 0.38 over DOW. As many baby boomers are still indifferent towards banks, it makes sense to outline Bank Of Montreal. We will analyze why it could be a much better year for Bank Of Montreal shareholders.
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Reviewed by Michael Smolkin
Bank Of Montreal has roughly 195.26 B in cash with (13.04 B) of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 305.41. On a scale of 0 to 100, Bank Of Montreal holds a performance score of 7. The firm shows a Beta (market volatility) of -0.4202, which signifies possible diversification benefits within a given portfolio. Let's try to break down what Bank Of Montreal's beta means in this case. As returns on the market increase, returns on owning Bank Of Montreal are expected to decrease at a much lower rate. During the bear market, Bank Of Montreal is likely to outperform the market. Although it is extremely important to respect Bank Of Montreal historical returns, it is better to be realistic regarding the information on equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Bank Of Montreal technical indicators, you can presently evaluate if the expected return of 0.24% will be sustainable into the future. Please makes use of Bank Of Montreal semi variance, and the relationship between the treynor ratio and daily balance of power to make a quick decision on whether Bank Of Montreal price patterns will revert.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Bank of Montreal. Your research has to be compared to or analyzed against Bank of Montreal's peers to derive any actionable benefits. When done correctly, Bank of Montreal's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Bank of Montreal.
Investing in Bank of Montreal, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Bank of Montreal along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Bank of Montreal's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Bank of Montreal's Liquidity
Bank of Montreal financial leverage refers to using borrowed capital as a funding source to finance Bank of Montreal ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Bank of Montreal financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Bank of Montreal's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Bank of Montreal's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Bank of Montreal's total debt and its cash.
Bank of Montreal Correlation with Peers
Investors in Bank can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Bank of Montreal. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Bank of Montreal and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Bank is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage. Please check volatility of Bank for more details
Breaking it down
Bank Of Montreal appears to be very steady, given 1 month investment horizon. Bank Of Montreal secures Sharpe Ratio (or Efficiency) of 0.1, which signifies that the company had 0.1% of return per unit of risk over the last month. Our standpoint towards foreseeing the volatility of a stock is to use all available market data together with stock specific technical indicators that cannot be diversified away. We have found twenty-eight technical indicators for Bank Of Montreal, which you can use to evaluate future volatility of the firm. Please makes use of Bank Of Montreal Mean Deviation of 1.85, downside deviation of 2.52, and Risk Adjusted Performance of 0.1688 to double-check if our risk estimates are consistent with your expectations.
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Bank of Montreal. Please refer to our Terms of Use for any information regarding our disclosure principles.