Correlation Between Bank of Nova Scotia and First Solar
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and First Solar 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 Solar 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 Solar, you can compare the effects of market volatilities on Bank of Nova Scotia and First Solar 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 Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and First Solar.
Diversification Opportunities for Bank of Nova Scotia and First Solar
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and First is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and First Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Solar 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 Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Solar has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and First Solar go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and First Solar
Assuming the 90 days trading horizon The Bank of is expected to generate 0.11 times more return on investment than First Solar. However, The Bank of is 8.76 times less risky than First Solar. It trades about 0.22 of its potential returns per unit of risk. First Solar is currently generating about -0.21 per unit of risk. If you would invest 108,499 in The Bank of on November 7, 2024 and sell it today you would earn a total of 1,501 from holding The Bank of or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
The Bank of vs. First Solar
Performance |
| Timeline |
| Bank of Nova Scotia |
| First Solar |
Bank of Nova Scotia and First Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and First Solar
The main advantage of trading using opposite Bank of Nova Scotia and First Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, First Solar 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 Solar will offset losses from the drop in First Solar's long position.| Bank of Nova Scotia vs. Cognizant Technology Solutions | Bank of Nova Scotia vs. DXC Technology | Bank of Nova Scotia vs. McEwen Mining | Bank of Nova Scotia vs. Lloyds Banking Group |
| First Solar vs. Applied Materials | First Solar vs. Verizon Communications | First Solar vs. CVS Health | First Solar 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |