Correlation Between Cogeco Communications and Bank of Nova Scotia
Can any of the company-specific risk be diversified away by investing in both Cogeco Communications 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 Cogeco Communications 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 Cogeco Communications and Bank of Nova, you can compare the effects of market volatilities on Cogeco Communications 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 Cogeco Communications with a short position of Bank of Nova Scotia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Bank of Nova Scotia.
Diversification Opportunities for Cogeco Communications and Bank of Nova Scotia
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogeco and Bank is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Bank of Nova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Nova Scotia and Cogeco Communications 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 Cogeco Communications 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 Cogeco Communications i.e., Cogeco Communications and Bank of Nova Scotia go up and down completely randomly.
Pair Corralation between Cogeco Communications and Bank of Nova Scotia
Assuming the 90 days trading horizon Cogeco Communications is expected to generate 2.7 times less return on investment than Bank of Nova Scotia. In addition to that, Cogeco Communications is 2.01 times more volatile than Bank of Nova. It trades about 0.05 of its total potential returns per unit of risk. Bank of Nova is currently generating about 0.29 per unit of volatility. If you would invest 8,750 in Bank of Nova on September 10, 2025 and sell it today you would earn a total of 1,254 from holding Bank of Nova or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogeco Communications vs. Bank of Nova
Performance |
| Timeline |
| Cogeco Communications |
| Bank of Nova Scotia |
Cogeco Communications and Bank of Nova Scotia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogeco Communications and Bank of Nova Scotia
The main advantage of trading using opposite Cogeco Communications and Bank of Nova Scotia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications 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.| Cogeco Communications vs. Cogeco Inc | Cogeco Communications vs. TeraGo Inc | Cogeco Communications vs. Stingray Group | Cogeco Communications vs. Yellow Pages Limited |
| Bank of Nova Scotia vs. Canadian Imperial Bank | Bank of Nova Scotia vs. Bank of Montreal | Bank of Nova Scotia vs. National Bank of | Bank of Nova Scotia vs. Toronto Dominion Bank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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