Correlation Between Bank of Nova Scotia and Las Vegas
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on Bank of Nova Scotia and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and Las Vegas.
Diversification Opportunities for Bank of Nova Scotia and Las Vegas
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Las is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and Las Vegas go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and Las Vegas
Assuming the 90 days trading horizon The Bank of is expected to generate 0.15 times more return on investment than Las Vegas. However, The Bank of is 6.78 times less risky than Las Vegas. It trades about 0.24 of its potential returns per unit of risk. Las Vegas Sands is currently generating about -0.35 per unit of risk. If you would invest 108,499 in The Bank of on October 22, 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 Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
The Bank of vs. Las Vegas Sands
Performance |
| Timeline |
| Bank of Nova Scotia |
| Las Vegas Sands |
Bank of Nova Scotia and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and Las Vegas
The main advantage of trading using opposite Bank of Nova Scotia and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| Bank of Nova Scotia vs. First Republic Bank | Bank of Nova Scotia vs. FIBRA Storage | Bank of Nova Scotia vs. Verizon Communications | Bank of Nova Scotia vs. Grupo Industrial Saltillo |
| Las Vegas vs. Verizon Communications | Las Vegas vs. Southwest Airlines | Las Vegas vs. DXC Technology | Las Vegas vs. Applied Materials |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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