Correlation Between Bank of Nova Scotia and FibroGen
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and FibroGen 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 FibroGen 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 FibroGen, you can compare the effects of market volatilities on Bank of Nova Scotia and FibroGen 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 FibroGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and FibroGen.
Diversification Opportunities for Bank of Nova Scotia and FibroGen
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and FibroGen is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and FibroGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibroGen 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 FibroGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibroGen has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and FibroGen go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and FibroGen
Assuming the 90 days trading horizon The Bank of is expected to generate 0.22 times more return on investment than FibroGen. However, The Bank of is 4.58 times less risky than FibroGen. It trades about 0.23 of its potential returns per unit of risk. FibroGen is currently generating about -0.06 per unit of risk. If you would invest 77,941 in The Bank of on September 2, 2024 and sell it today you would earn a total of 42,059 from holding The Bank of or generate 53.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
The Bank of vs. FibroGen
Performance |
| Timeline |
| Bank of Nova Scotia |
| FibroGen |
Bank of Nova Scotia and FibroGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and FibroGen
The main advantage of trading using opposite Bank of Nova Scotia and FibroGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, FibroGen 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 FibroGen will offset losses from the drop in FibroGen's long position.| Bank of Nova Scotia vs. UBS Group AG | Bank of Nova Scotia vs. iShares Global Timber | Bank of Nova Scotia vs. Vanguard World | Bank of Nova Scotia vs. iShares Trust |
| FibroGen vs. Monster Beverage Corp | FibroGen vs. New Oriental Education | FibroGen vs. KB Home | FibroGen vs. Applied Materials |
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 CEOs Directory module to screen CEOs from public companies around the world.
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