Correlation Between Atrium Mortgage and Bank of Nova Scotia

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

Diversification Opportunities for Atrium Mortgage and Bank of Nova Scotia

0.92

Correlation Coefficient

Atrium Mortgage  Bank of Nova Scotia

Almost no diversification

The 3 months correlation between Atrium and Bank is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Atrium Mortgage Investment 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 Atrium Mortgage 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 Atrium Mortgage Investment 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 Atrium Mortgage i.e., Atrium Mortgage and Bank of Nova Scotia go up and down completely randomly.

Pair Corralation between Atrium Mortgage and Bank of Nova Scotia

Assuming the 90 days horizon Atrium Mortgage is expected to generate 1.62 times less return on investment than Bank of Nova Scotia. In addition to that, Atrium Mortgage is 1.41 times more volatile than Bank of Nova. It trades about 0.19 of its total potential returns per unit of risk. Bank of Nova is currently generating about 0.44 per unit of volatility. If you would invest  6,628  in Bank of Nova on April 23, 2025 and sell it today you would earn a total of  1,041  from holding Bank of Nova or generate 15.71% return on investment over 90 days.

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

Atrium Mortgage Investment  vs.  Bank of Nova

Atrium Mortgage Inve

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atrium Mortgage Investment are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Atrium Mortgage may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Bank of Nova Scotia

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Nova are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bank of Nova Scotia displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atrium Mortgage and Bank of Nova Scotia

The main advantage of trading using opposite Atrium Mortgage and Bank of Nova Scotia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atrium Mortgage 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 Atrium Mortgage Investment 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.