Correlation Between Mobileye Global and Bank of Nova Scotia

Can any of the company-specific risk be diversified away by investing in both Mobileye Global and Bank of Nova Scotia 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 Mobileye Global and Bank of Nova Scotia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mobileye Global Class and The Bank of, you can compare the effects of market volatilities on Mobileye Global and Bank of Nova Scotia 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 Mobileye Global with a short position of Bank of Nova Scotia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileye Global and Bank of Nova Scotia.

Diversification Opportunities for Mobileye Global and Bank of Nova Scotia

0.64

Correlation Coefficient

Mobileye Global  Bank of Nova Scotia

Poor diversification

The 3 months correlation between Mobileye and Bank is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Nova Scotia and Mobileye Global 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 Mobileye Global Class are associated (or correlated) with Bank of Nova Scotia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Nova Scotia has no effect on the direction of Mobileye Global i.e., Mobileye Global and Bank of Nova Scotia go up and down completely randomly.

Pair Corralation between Mobileye Global and Bank of Nova Scotia

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Bank of Nova Scotia. In addition to that, Mobileye Global is 5.21 times more volatile than The Bank of. It trades about -0.13 of its total potential returns per unit of risk. The Bank of is currently generating about -0.02 per unit of volatility. If you would invest  4,996  in The Bank of on October 22, 2024 and sell it today you would lose (23.00) from holding The Bank of or give up 0.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.89%
Values	Daily Returns

Mobileye Global Class  vs.  The Bank of

Mobileye Global Class

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mobileye Global Class are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Mobileye Global showed solid returns over the last few months and may actually be approaching a breakup point.

Bank of Nova Scotia

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Bank of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Bank of Nova Scotia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mobileye Global and Bank of Nova Scotia

The main advantage of trading using opposite Mobileye Global and Bank of Nova Scotia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobileye Global position performs unexpectedly, Bank of Nova Scotia 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 Bank of Nova Scotia will offset losses from the drop in Bank of Nova Scotia's long position.

The idea behind Mobileye Global Class and The Bank of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.