Correlation Between Bank of Nova Scotia and Emera Srs
Can any of the company-specific risk be diversified away by investing in both Bank of Nova Scotia and Emera Srs 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 Emera Srs 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 Emera Srs C, you can compare the effects of market volatilities on Bank of Nova Scotia and Emera Srs 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 Emera Srs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Nova Scotia and Emera Srs.
Diversification Opportunities for Bank of Nova Scotia and Emera Srs
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Emera is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Nova and Emera Srs C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Srs C 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 Emera Srs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Srs C has no effect on the direction of Bank of Nova Scotia i.e., Bank of Nova Scotia and Emera Srs go up and down completely randomly.
Pair Corralation between Bank of Nova Scotia and Emera Srs
Assuming the 90 days trading horizon Bank of Nova is expected to generate 1.24 times more return on investment than Emera Srs. However, Bank of Nova Scotia is 1.24 times more volatile than Emera Srs C. It trades about 0.3 of its potential returns per unit of risk. Emera Srs C is currently generating about 0.1 per unit of risk. If you would invest 8,459 in Bank of Nova on September 2, 2025 and sell it today you would earn a total of 1,144 from holding Bank of Nova or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Bank of Nova vs. Emera Srs C
Performance |
| Timeline |
| Bank of Nova Scotia |
| Emera Srs C |
Bank of Nova Scotia and Emera Srs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Nova Scotia and Emera Srs
The main advantage of trading using opposite Bank of Nova Scotia and Emera Srs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Nova Scotia position performs unexpectedly, Emera Srs 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 Emera Srs will offset losses from the drop in Emera Srs' long position.| Bank of Nova Scotia vs. Partners Value Investments | Bank of Nova Scotia vs. Westshore Terminals Investment | Bank of Nova Scotia vs. Highwood Asset Management | Bank of Nova Scotia vs. Plantify Foods |
| Emera Srs vs. Reliq Health Technologies | Emera Srs vs. Nexoptic Technology Corp | Emera Srs vs. Doman Building Materials | Emera Srs vs. Enerev5 Metals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |