Correlation Between Bright Scholar and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Bright Scholar 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 Bright Scholar and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Scholar Education and Nomura Holdings ADR, you can compare the effects of market volatilities on Bright Scholar 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 Bright Scholar with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Nomura Holdings.
Diversification Opportunities for Bright Scholar and Nomura Holdings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bright and Nomura is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education 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 Bright Scholar 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 Bright Scholar Education 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 Bright Scholar i.e., Bright Scholar and Nomura Holdings go up and down completely randomly.
Pair Corralation between Bright Scholar and Nomura Holdings
Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the Nomura Holdings. In addition to that, Bright Scholar is 1.35 times more volatile than Nomura Holdings ADR. It trades about -0.24 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.42 per unit of volatility. If you would invest 518.00 in Nomura Holdings ADR on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Nomura Holdings ADR or generate 17.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Scholar Education vs. Nomura Holdings ADR
Performance |
| Timeline |
| Bright Scholar Education |
| Nomura Holdings ADR |
Bright Scholar and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Nomura Holdings
The main advantage of trading using opposite Bright Scholar and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar 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.| Bright Scholar vs. American Public Education | Bright Scholar vs. ATA Creativity Global | Bright Scholar vs. Cogna Educacao SA | Bright Scholar vs. Adtalem Global Education |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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