Correlation Between Bank of Nova Scotia and F5 Networks
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and F5 Networks 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 F5 Networks 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 F5 Networks, you can compare the effects of market volatilities on Bank of Nova Scotia and F5 Networks 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 F5 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and F5 Networks.
Diversification Opportunities for Bank of Nova Scotia and F5 Networks
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and FFIV is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and F5 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F5 Networks 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 F5 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F5 Networks has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and F5 Networks go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and F5 Networks
If you would invest 108,499 in The Bank of on November 7, 2024 and sell it today you would earn a total of 1,501 from holding The Bank of or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
The Bank of vs. F5 Networks
Performance |
| Timeline |
| Bank of Nova Scotia |
| F5 Networks |
Bank of Nova Scotia and F5 Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and F5 Networks
The main advantage of trading using opposite Bank of Nova Scotia and F5 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, F5 Networks 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 F5 Networks will offset losses from the drop in F5 Networks' long position.| Bank of Nova Scotia vs. Cognizant Technology Solutions | Bank of Nova Scotia vs. DXC Technology | Bank of Nova Scotia vs. McEwen Mining | Bank of Nova Scotia vs. Lloyds Banking Group |
| F5 Networks vs. Micron Technology | F5 Networks vs. Air Transport Services | F5 Networks vs. Verizon Communications | F5 Networks vs. Grupo Sports World |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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