Correlation Between Digi International and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Nomura Holdings ADR, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Nomura Holdings.
Diversification Opportunities for Digi International and Nomura Holdings
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digi and Nomura is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Digi International 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 Digi International 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 Digi International 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 Digi International i.e., Digi International and Nomura Holdings go up and down completely randomly.
Pair Corralation between Digi International and Nomura Holdings
Given the investment horizon of 90 days Digi International is expected to generate 1.18 times more return on investment than Nomura Holdings. However, Digi International is 1.18 times more volatile than Nomura Holdings ADR. It trades about 0.11 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.01 per unit of risk. If you would invest 2,378 in Digi International on September 3, 2024 and sell it today you would earn a total of 970.00 from holding Digi International or generate 40.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Nomura Holdings ADR
Performance |
| Timeline |
| Digi International |
| Nomura Holdings ADR |
Digi International and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Nomura Holdings
The main advantage of trading using opposite Digi International and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Highway Holdings Limited | Digi International vs. QCR Holdings | Digi International vs. Partner Communications | Digi International vs. Acumen Pharmaceuticals |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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