Correlation Between Marimaca Copper and Bank of Nova Scotia

Can any of the company-specific risk be diversified away by investing in both Marimaca Copper 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 Marimaca Copper 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 Marimaca Copper Corp and Bank of Nova, you can compare the effects of market volatilities on Marimaca Copper 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 Marimaca Copper with a short position of Bank of Nova Scotia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marimaca Copper and Bank of Nova Scotia.

Diversification Opportunities for Marimaca Copper and Bank of Nova Scotia

0.79

Correlation Coefficient

Marimaca Copper  Bank of Nova Scotia

Poor diversification

The 3 months correlation between Marimaca and Bank is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marimaca Copper Corp 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 Marimaca Copper 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 Marimaca Copper Corp 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 Marimaca Copper i.e., Marimaca Copper and Bank of Nova Scotia go up and down completely randomly.

Pair Corralation between Marimaca Copper and Bank of Nova Scotia

Assuming the 90 days trading horizon Marimaca Copper Corp is expected to generate 8.6 times more return on investment than Bank of Nova Scotia. However, Marimaca Copper is 8.6 times more volatile than Bank of Nova. It trades about 0.28 of its potential returns per unit of risk. Bank of Nova is currently generating about 0.36 per unit of risk. If you would invest  467.00  in Marimaca Copper Corp on May 6, 2025 and sell it today you would earn a total of  513.00  from holding Marimaca Copper Corp or generate 109.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Marimaca Copper Corp  vs.  Bank of Nova

Marimaca Copper Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Marimaca Copper Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Marimaca Copper displayed solid returns over the last few months and may actually be approaching a breakup point.

Bank of Nova Scotia

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Nova are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bank of Nova Scotia may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Marimaca Copper and Bank of Nova Scotia

The main advantage of trading using opposite Marimaca Copper and Bank of Nova Scotia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marimaca Copper 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 Marimaca Copper Corp and Bank of Nova 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.