Correlation Between Bank of Nova Scotia and FibraHotel
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and FibraHotel 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 FibraHotel 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 FibraHotel, you can compare the effects of market volatilities on Bank of Nova Scotia and FibraHotel 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 FibraHotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and FibraHotel.
Diversification Opportunities for Bank of Nova Scotia and FibraHotel
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and FibraHotel is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and FibraHotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibraHotel 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 FibraHotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibraHotel has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and FibraHotel go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and FibraHotel
If you would invest 789.00 in FibraHotel on August 28, 2024 and sell it today you would earn a total of 92.00 from holding FibraHotel or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. FibraHotel
Performance |
| Timeline |
| Bank of Nova Scotia |
| FibraHotel |
Bank of Nova Scotia and FibraHotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and FibraHotel
The main advantage of trading using opposite Bank of Nova Scotia and FibraHotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, FibraHotel 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 FibraHotel will offset losses from the drop in FibraHotel'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 |
| FibraHotel vs. Promotora y Operadora | FibraHotel vs. Megacable Holdings S | FibraHotel vs. ALPEK SAB de | FibraHotel vs. Gentera SAB de |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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