Correlation Between Aehr Test and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Aehr Test 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 Aehr Test and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aehr Test Systems and Nomura Holdings ADR, you can compare the effects of market volatilities on Aehr Test 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 Aehr Test with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aehr Test and Nomura Holdings.
Diversification Opportunities for Aehr Test and Nomura Holdings
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aehr and Nomura is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aehr Test Systems and Nomura Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings ADR and Aehr Test 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 Aehr Test Systems 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 ADR has no effect on the direction of Aehr Test i.e., Aehr Test and Nomura Holdings go up and down completely randomly.
Pair Corralation between Aehr Test and Nomura Holdings
Given the investment horizon of 90 days Aehr Test Systems is expected to under-perform the Nomura Holdings. In addition to that, Aehr Test is 2.46 times more volatile than Nomura Holdings ADR. It trades about -0.03 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.08 per unit of volatility. If you would invest 421.00 in Nomura Holdings ADR on September 4, 2024 and sell it today you would earn a total of 196.00 from holding Nomura Holdings ADR or generate 46.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aehr Test Systems vs. Nomura Holdings ADR
Performance |
| Timeline |
| Aehr Test Systems |
| Nomura Holdings ADR |
Aehr Test and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aehr Test and Nomura Holdings
The main advantage of trading using opposite Aehr Test and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aehr Test 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.| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
| Nomura Holdings vs. Perella Weinberg Partners | Nomura Holdings vs. Oppenheimer Holdings | Nomura Holdings vs. Stifel Financial Corp | Nomura Holdings vs. Piper Sandler Companies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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