Correlation Between Bank of Nova Scotia and RepliCel Life
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and RepliCel Life 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 RepliCel Life 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 RepliCel Life Sciences, you can compare the effects of market volatilities on Bank of Nova Scotia and RepliCel Life 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 RepliCel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and RepliCel Life.
Diversification Opportunities for Bank of Nova Scotia and RepliCel Life
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and RepliCel is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Nova and RepliCel Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RepliCel Life Sciences 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 RepliCel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RepliCel Life Sciences has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and RepliCel Life go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and RepliCel Life
Assuming the 90 days trading horizon Bank of Nova Scotia is expected to generate 2.68 times less return on investment than RepliCel Life. But when comparing it to its historical volatility, Bank of Nova is 11.55 times less risky than RepliCel Life. It trades about 0.04 of its potential returns per unit of risk. RepliCel Life Sciences is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 13.00 in RepliCel Life Sciences on November 2, 2024 and sell it today you would lose (12.00) from holding RepliCel Life Sciences or give up 92.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bank of Nova vs. RepliCel Life Sciences
Performance |
| Timeline |
| Bank of Nova Scotia |
| RepliCel Life Sciences |
Bank of Nova Scotia and RepliCel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and RepliCel Life
The main advantage of trading using opposite Bank of Nova Scotia and RepliCel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, RepliCel Life 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 RepliCel Life will offset losses from the drop in RepliCel Life'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 |
| RepliCel Life vs. Sirona Biochem Corp | RepliCel Life vs. Quest PharmaTech | RepliCel Life vs. RepliCel Life Sciences |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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