Correlation Between Bank of Nova Scotia and Nevada King
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and Nevada King 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 Nevada King 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 Nevada King Gold, you can compare the effects of market volatilities on Bank of Nova Scotia and Nevada King 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 Nevada King. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and Nevada King.
Diversification Opportunities for Bank of Nova Scotia and Nevada King
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Nevada is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Nova and Nevada King Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada King Gold 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 Nevada King. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada King Gold has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and Nevada King go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and Nevada King
Assuming the 90 days trading horizon Bank of Nova is expected to generate 0.17 times more return on investment than Nevada King. However, Bank of Nova is 5.77 times less risky than Nevada King. It trades about 0.22 of its potential returns per unit of risk. Nevada King Gold 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 | 100.0% |
| Values | Daily Returns |
Bank of Nova vs. Nevada King Gold
Performance |
| Timeline |
| Bank of Nova Scotia |
| Nevada King Gold |
Bank of Nova Scotia and Nevada King Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and Nevada King
The main advantage of trading using opposite Bank of Nova Scotia and Nevada King positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, Nevada King 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 Nevada King will offset losses from the drop in Nevada King'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 |
| Nevada King vs. New Found Gold | Nevada King vs. Goliath Resources | Nevada King vs. Lion One Metals | Nevada King vs. Dolly Varden Silver |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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