Correlation Between Academy Sports and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Academy Sports 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 Academy Sports and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Academy Sports Outdoors and Nomura Holdings ADR, you can compare the effects of market volatilities on Academy Sports 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 Academy Sports with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Academy Sports and Nomura Holdings.
Diversification Opportunities for Academy Sports and Nomura Holdings
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Academy and Nomura is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Academy Sports Outdoors 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 Academy Sports 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 Academy Sports Outdoors 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 Academy Sports i.e., Academy Sports and Nomura Holdings go up and down completely randomly.
Pair Corralation between Academy Sports and Nomura Holdings
Considering the 90-day investment horizon Academy Sports is expected to generate 13.68 times less return on investment than Nomura Holdings. In addition to that, Academy Sports is 1.26 times more volatile than Nomura Holdings ADR. It trades about 0.0 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.06 per unit of volatility. If you would invest 357.00 in Nomura Holdings ADR on August 30, 2024 and sell it today you would earn a total of 236.00 from holding Nomura Holdings ADR or generate 66.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Academy Sports Outdoors vs. Nomura Holdings ADR
Performance |
| Timeline |
| Academy Sports Outdoors |
| Nomura Holdings ADR |
Academy Sports and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Academy Sports and Nomura Holdings
The main advantage of trading using opposite Academy Sports and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Academy Sports 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.| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. RH |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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