BNS has been tightly correlated with CAD since July 2014. Specifically, the relationship appears to be:
(daily % change in BNS) = 2x(daily % change in CADUSD)
CAD itself is correlated with oil.
I originally planned to buy CAD for an upcoming oil rally. But I ended up buying BNS instead. It pays a 5% dividend.
As someone with BNS holdings I am going to be cutting back my position and taking profits. Why?
The main reason is illsutrated in the chart above, the stock has had a tremendous rally in recent months and is now trading at a 10% premium to its 200D EMA. Since 2013 there have been two other instances where BNS was trading 10% over the 200D EMA and over the...
