Correlation Between Bank of Nova Scotia and Financiera Independencia
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and Financiera Independencia 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 Financiera Independencia 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 Financiera Independencia SAB, you can compare the effects of market volatilities on Bank of Nova Scotia and Financiera Independencia 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 Financiera Independencia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and Financiera Independencia.
Diversification Opportunities for Bank of Nova Scotia and Financiera Independencia
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Financiera is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Financiera Independencia SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiera Independencia 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 Financiera Independencia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiera Independencia has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and Financiera Independencia go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and Financiera Independencia
Assuming the 90 days trading horizon The Bank of is expected to generate 6.32 times more return on investment than Financiera Independencia. However, Bank of Nova Scotia is 6.32 times more volatile than Financiera Independencia SAB. It trades about 0.16 of its potential returns per unit of risk. Financiera Independencia SAB is currently generating about -0.22 per unit of risk. If you would invest 101,800 in The Bank of on September 14, 2024 and sell it today you would earn a total of 10,700 from holding The Bank of or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. Financiera Independencia SAB
Performance |
| Timeline |
| Bank of Nova Scotia |
| Financiera Independencia |
Bank of Nova Scotia and Financiera Independencia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and Financiera Independencia
The main advantage of trading using opposite Bank of Nova Scotia and Financiera Independencia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, Financiera Independencia 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 Financiera Independencia will offset losses from the drop in Financiera Independencia's long position.| Bank of Nova Scotia vs. Verizon Communications | Bank of Nova Scotia vs. New Oriental Education | Bank of Nova Scotia vs. McEwen Mining | Bank of Nova Scotia vs. Grupo Sports World |
| Financiera Independencia vs. Prudential Financial | Financiera Independencia vs. Martin Marietta Materials | Financiera Independencia vs. The Bank of | Financiera Independencia vs. DXC Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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