Correlation Between Discover Financial and NOVANT
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By analyzing existing cross correlation between Discover Financial Services and NOVANT 3168 01 NOV 51, you can compare the effects of market volatilities on Discover Financial and NOVANT 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 Discover Financial with a short position of NOVANT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and NOVANT.
Diversification Opportunities for Discover Financial and NOVANT
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Discover and NOVANT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and NOVANT 3168 01 NOV 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVANT 3168 01 and Discover Financial 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 Discover Financial Services are associated (or correlated) with NOVANT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVANT 3168 01 has no effect on the direction of Discover Financial i.e., Discover Financial and NOVANT go up and down completely randomly.
Pair Corralation between Discover Financial and NOVANT
Considering the 90-day investment horizon Discover Financial Services is expected to generate 1.46 times more return on investment than NOVANT. However, Discover Financial is 1.46 times more volatile than NOVANT 3168 01 NOV 51. It trades about 0.07 of its potential returns per unit of risk. NOVANT 3168 01 NOV 51 is currently generating about 0.01 per unit of risk. If you would invest 9,808 in Discover Financial Services on August 30, 2024 and sell it today you would earn a total of 8,448 from holding Discover Financial Services or generate 86.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.12% |
| Values | Daily Returns |
Discover Financial Services vs. NOVANT 3168 01 NOV 51
Performance |
| Timeline |
| Discover Financial |
| NOVANT 3168 01 |
Discover Financial and NOVANT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and NOVANT
The main advantage of trading using opposite Discover Financial and NOVANT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, NOVANT 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 NOVANT will offset losses from the drop in NOVANT's long position.| Discover Financial vs. Ally Financial | Discover Financial vs. Synchrony Financial | Discover Financial vs. Western Union Co | Discover Financial vs. Bread Financial Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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