Correlation Between Bank of Nova Scotia and CI Financial
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and CI Financial 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 CI Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Nova and CI Financial Corp, you can compare the effects of market volatilities on Bank of Nova Scotia and CI Financial 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 CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and CI Financial.
Diversification Opportunities for Bank of Nova Scotia and CI Financial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and CIX is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Nova and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp 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 Bank of Nova are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and CI Financial go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and CI Financial
Assuming the 90 days trading horizon Bank of Nova is expected to under-perform the CI Financial. In addition to that, Bank of Nova Scotia is 4.44 times more volatile than CI Financial Corp. It trades about -0.22 of its total potential returns per unit of risk. CI Financial Corp is currently generating about 0.07 per unit of volatility. If you would invest 3,127 in CI Financial Corp on November 27, 2024 and sell it today you would earn a total of 8.00 from holding CI Financial Corp or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Nova vs. CI Financial Corp
Performance |
| Timeline |
| Bank of Nova Scotia |
| CI Financial Corp |
Bank of Nova Scotia and CI Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and CI Financial
The main advantage of trading using opposite Bank of Nova Scotia and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, CI Financial 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 CI Financial will offset losses from the drop in CI Financial's long position.| Bank of Nova Scotia vs. Toronto Dominion Bank | Bank of Nova Scotia vs. Royal Bank of | Bank of Nova Scotia vs. Bank of Montreal | Bank of Nova Scotia vs. Canadian Imperial Bank |
| CI Financial vs. IGM Financial | CI Financial vs. iA Financial | CI Financial vs. Great West Lifeco | CI Financial vs. Laurentian Bank |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |