Correlation Between Bank of Nova Scotia and Eldav L
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and Eldav L 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 Eldav L 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 Eldav L, you can compare the effects of market volatilities on Bank of Nova Scotia and Eldav L 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 Eldav L. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and Eldav L.
Diversification Opportunities for Bank of Nova Scotia and Eldav L
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Eldav is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Nova and Eldav L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldav L 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 Eldav L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldav L has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and Eldav L go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and Eldav L
Considering the 90-day investment horizon Bank of Nova Scotia is expected to generate 8.5 times less return on investment than Eldav L. But when comparing it to its historical volatility, Bank of Nova is 2.44 times less risky than Eldav L. It trades about 0.02 of its potential returns per unit of risk. Eldav L is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 15,990 in Eldav L on January 24, 2024 and sell it today you would earn a total of 4,510 from holding Eldav L or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.58% |
| Values | Daily Returns |
Bank of Nova vs. Eldav L
Performance |
| Timeline |
| Bank of Nova Scotia |
| Eldav L |
Bank of Nova Scotia and Eldav L Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and Eldav L
The main advantage of trading using opposite Bank of Nova Scotia and Eldav L positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, Eldav L 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 Eldav L will offset losses from the drop in Eldav L's long position.| Bank of Nova Scotia vs. Toronto Dominion Bank | Bank of Nova Scotia vs. Royal Bank of | Bank of Nova Scotia vs. Canadian Imperial Bank | Bank of Nova Scotia vs. JPMorgan Chase Co |
| Eldav L vs. SR Accord | Eldav L vs. Rapac Communication Infrastructure | Eldav L vs. Nextcom | Eldav L vs. EN Shoham Business |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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