Correlation Between Bank of Nova Scotia and DXC Technology
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and DXC Technology 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 DXC Technology 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 DXC Technology, you can compare the effects of market volatilities on Bank of Nova Scotia and DXC Technology 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 DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and DXC Technology.
Diversification Opportunities for Bank of Nova Scotia and DXC Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and DXC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and DXC Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology 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 DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and DXC Technology go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and DXC Technology
If you would invest 36,000 in DXC Technology on August 27, 2024 and sell it today you would earn a total of 0.00 from holding DXC Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. DXC Technology
Performance |
| Timeline |
| Bank of Nova Scotia |
| DXC Technology |
Bank of Nova Scotia and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and DXC Technology
The main advantage of trading using opposite Bank of Nova Scotia and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| Bank of Nova Scotia vs. Grupo Hotelero Santa | Bank of Nova Scotia vs. KB Home | Bank of Nova Scotia vs. Genworth Financial | Bank of Nova Scotia vs. McEwen Mining |
| DXC Technology vs. Grupo Sports World | DXC Technology vs. Ross Stores | DXC Technology vs. Prudential Financial | DXC Technology vs. Southern Copper |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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