Correlation Between CONAGRA FOODS and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both CONAGRA FOODS 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 CONAGRA FOODS and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONAGRA FOODS and Nomura Holdings, you can compare the effects of market volatilities on CONAGRA FOODS 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 CONAGRA FOODS with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONAGRA FOODS and Nomura Holdings.
Diversification Opportunities for CONAGRA FOODS and Nomura Holdings
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CONAGRA and Nomura is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CONAGRA FOODS and Nomura Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings and CONAGRA FOODS 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 CONAGRA FOODS 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 CONAGRA FOODS i.e., CONAGRA FOODS and Nomura Holdings go up and down completely randomly.
Pair Corralation between CONAGRA FOODS and Nomura Holdings
Assuming the 90 days trading horizon CONAGRA FOODS is expected to under-perform the Nomura Holdings. But the stock apears to be less risky and, when comparing its historical volatility, CONAGRA FOODS is 1.53 times less risky than Nomura Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Nomura Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 331.00 in Nomura Holdings on October 16, 2024 and sell it today you would earn a total of 220.00 from holding Nomura Holdings or generate 66.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONAGRA FOODS vs. Nomura Holdings
Performance |
| Timeline |
| CONAGRA FOODS |
| Nomura Holdings |
CONAGRA FOODS and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONAGRA FOODS and Nomura Holdings
The main advantage of trading using opposite CONAGRA FOODS and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONAGRA FOODS 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.| CONAGRA FOODS vs. Comba Telecom Systems | CONAGRA FOODS vs. Agilent Technologies | CONAGRA FOODS vs. INTERSHOP Communications Aktiengesellschaft | CONAGRA FOODS vs. Chunghwa Telecom Co |
| Nomura Holdings vs. Apollo Investment Corp | Nomura Holdings vs. AOYAMA TRADING | Nomura Holdings vs. WisdomTree Investments | Nomura Holdings vs. OURGAME INTHOLDL 00005 |
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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