Correlation Between Bank of Nova Scotia and Fibra Mty
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and Fibra Mty 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 Fibra Mty 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 Fibra Mty SAPI, you can compare the effects of market volatilities on Bank of Nova Scotia and Fibra Mty 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 Fibra Mty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and Fibra Mty.
Diversification Opportunities for Bank of Nova Scotia and Fibra Mty
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Fibra is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Fibra Mty SAPI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra Mty SAPI 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 Fibra Mty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra Mty SAPI has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and Fibra Mty go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and Fibra Mty
Assuming the 90 days trading horizon The Bank of is expected to generate 3.04 times more return on investment than Fibra Mty. However, Bank of Nova Scotia is 3.04 times more volatile than Fibra Mty SAPI. It trades about 0.22 of its potential returns per unit of risk. Fibra Mty SAPI is currently generating about 0.04 per unit of risk. If you would invest 101,800 in The Bank of on August 28, 2024 and sell it today you would earn a total of 14,433 from holding The Bank of or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Bank of vs. Fibra Mty SAPI
Performance |
| Timeline |
| Bank of Nova Scotia |
| Fibra Mty SAPI |
Bank of Nova Scotia and Fibra Mty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and Fibra Mty
The main advantage of trading using opposite Bank of Nova Scotia and Fibra Mty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, Fibra Mty 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 Fibra Mty will offset losses from the drop in Fibra Mty's long position.| Bank of Nova Scotia vs. McEwen Mining | Bank of Nova Scotia vs. Costco Wholesale | Bank of Nova Scotia vs. Monster Beverage Corp | Bank of Nova Scotia vs. Grupo Sports World |
| Fibra Mty vs. Deutsche Bank Aktiengesellschaft | Fibra Mty vs. FIBRA Storage | Fibra Mty vs. Ross Stores | Fibra Mty vs. The Bank of |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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