Correlation Between Bank of Nova Scotia and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and ConocoPhillips 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 Bank of Nova Scotia and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Bank of and ConocoPhillips, you can compare the effects of market volatilities on Bank of Nova Scotia and ConocoPhillips 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 Bank of Nova Scotia with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and ConocoPhillips.
Diversification Opportunities for Bank of Nova Scotia and ConocoPhillips
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and ConocoPhillips is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Bank of Nova Scotia 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 The Bank of are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and ConocoPhillips go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and ConocoPhillips
Assuming the 90 days trading horizon The Bank of is expected to generate 0.8 times more return on investment than ConocoPhillips. However, The Bank of is 1.25 times less risky than ConocoPhillips. It trades about 0.09 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.04 per unit of risk. If you would invest 78,237 in The Bank of on September 12, 2024 and sell it today you would earn a total of 37,563 from holding The Bank of or generate 48.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. ConocoPhillips
Performance |
| Timeline |
| Bank of Nova Scotia |
| ConocoPhillips |
Bank of Nova Scotia and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and ConocoPhillips
The main advantage of trading using opposite Bank of Nova Scotia and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| Bank of Nova Scotia vs. Genworth Financial | Bank of Nova Scotia vs. McEwen Mining | Bank of Nova Scotia vs. Samsung Electronics Co | Bank of Nova Scotia vs. Prudential Financial |
| ConocoPhillips vs. Delta Air Lines | ConocoPhillips vs. Verizon Communications | ConocoPhillips vs. The Bank of | ConocoPhillips vs. McEwen Mining |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |