Correlation Between Banco Santander and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Banco Santander 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 Banco Santander and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Santander Brasil and Nomura Holdings ADR, you can compare the effects of market volatilities on Banco Santander 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 Banco Santander with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Santander and Nomura Holdings.
Diversification Opportunities for Banco Santander and Nomura Holdings
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and Nomura is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Banco Santander Brasil 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 Banco Santander 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 Banco Santander Brasil 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 Banco Santander i.e., Banco Santander and Nomura Holdings go up and down completely randomly.
Pair Corralation between Banco Santander and Nomura Holdings
Given the investment horizon of 90 days Banco Santander Brasil is expected to under-perform the Nomura Holdings. In addition to that, Banco Santander is 1.09 times more volatile than Nomura Holdings ADR. It trades about -0.25 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.35 per unit of volatility. If you would invest 518.00 in Nomura Holdings ADR on August 31, 2024 and sell it today you would earn a total of 75.00 from holding Nomura Holdings ADR or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Santander Brasil vs. Nomura Holdings ADR
Performance |
| Timeline |
| Banco Santander Brasil |
| Nomura Holdings ADR |
Banco Santander and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Santander and Nomura Holdings
The main advantage of trading using opposite Banco Santander and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Santander 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.| Banco Santander vs. Banco De Chile | Banco Santander vs. CrossFirst Bankshares | Banco Santander vs. Banco Bradesco SA | Banco Santander vs. CF Bankshares |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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