Correlation Between Bank of Nova Scotia and Gossan Resources
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and Gossan Resources 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 Gossan Resources 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 Gossan Resources, you can compare the effects of market volatilities on Bank of Nova Scotia and Gossan Resources 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 Gossan Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and Gossan Resources.
Diversification Opportunities for Bank of Nova Scotia and Gossan Resources
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Gossan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Nova and Gossan Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gossan Resources 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 Gossan Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gossan Resources has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and Gossan Resources go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and Gossan Resources
Assuming the 90 days trading horizon Bank of Nova is expected to generate 0.06 times more return on investment than Gossan Resources. However, Bank of Nova is 16.63 times less risky than Gossan Resources. It trades about 0.22 of its potential returns per unit of risk. Gossan Resources is currently generating about 0.01 per unit of risk. If you would invest 6,238 in Bank of Nova on September 1, 2024 and sell it today you would earn a total of 1,747 from holding Bank of Nova or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank of Nova vs. Gossan Resources
Performance |
| Timeline |
| Bank of Nova Scotia |
| Gossan Resources |
Bank of Nova Scotia and Gossan Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and Gossan Resources
The main advantage of trading using opposite Bank of Nova Scotia and Gossan Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, Gossan Resources 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 Gossan Resources will offset losses from the drop in Gossan Resources' 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 |
| Gossan Resources vs. Kiplin Metals | Gossan Resources vs. Pure Energy Minerals | Gossan Resources vs. Noram Lithium Corp | Gossan Resources vs. Minnova Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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