Correlation Between Bank of Nova Scotia and First Republic
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on Bank of Nova Scotia and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and First Republic.
Diversification Opportunities for Bank of Nova Scotia and First Republic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and First Republic go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and First Republic
If you would invest 101,800 in The Bank of on August 31, 2024 and sell it today you would earn a total of 14,400 from holding The Bank of or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. First Republic Bank
Performance |
| Timeline |
| Bank of Nova Scotia |
| First Republic Bank |
Bank of Nova Scotia and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and First Republic
The main advantage of trading using opposite Bank of Nova Scotia and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| Bank of Nova Scotia vs. CVS Health | Bank of Nova Scotia vs. Capital One Financial | Bank of Nova Scotia vs. Lloyds Banking Group | Bank of Nova Scotia vs. Monster Beverage Corp |
| First Republic vs. Grupo Financiero Banorte | First Republic vs. Grupo Financiero Inbursa | First Republic vs. Banco del Bajo | First Republic vs. Fibra Mty SAPI |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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