Correlation Between AAC TECHNOLOGHLDGADR and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Nomura Holdings 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 AAC TECHNOLOGHLDGADR and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Nomura Holdings, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Nomura Holdings 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 AAC TECHNOLOGHLDGADR with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Nomura Holdings.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Nomura Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AAC and Nomura is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Nomura Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Nomura Holdings go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Nomura Holdings
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.97 times more return on investment than Nomura Holdings. However, AAC TECHNOLOGHLDGADR is 1.97 times more volatile than Nomura Holdings. It trades about 0.1 of its potential returns per unit of risk. Nomura Holdings is currently generating about 0.1 per unit of risk. If you would invest 360.00 in AAC TECHNOLOGHLDGADR on November 2, 2024 and sell it today you would earn a total of 114.00 from holding AAC TECHNOLOGHLDGADR or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Nomura Holdings
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Nomura Holdings |
AAC TECHNOLOGHLDGADR and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Nomura Holdings
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Nomura Holdings 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 Nomura Holdings will offset losses from the drop in Nomura Holdings' long position.| AAC TECHNOLOGHLDGADR vs. United Rentals | AAC TECHNOLOGHLDGADR vs. Harmony Gold Mining | AAC TECHNOLOGHLDGADR vs. ADRIATIC METALS LS 013355 | AAC TECHNOLOGHLDGADR vs. GREENX METALS LTD |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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