Correlation Between Dow Jones and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Nomura Holdings, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Nomura Holdings.
Diversification Opportunities for Dow Jones and Nomura Holdings
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Nomura is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Nomura Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings and Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Nomura Holdings go up and down completely randomly.
Pair Corralation between Dow Jones and Nomura Holdings
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.19 times less return on investment than Nomura Holdings. But when comparing it to its historical volatility, Dow Jones Industrial is 2.98 times less risky than Nomura Holdings. It trades about 0.11 of its potential returns per unit of risk. Nomura Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 313.00 in Nomura Holdings on August 29, 2024 and sell it today you would earn a total of 247.00 from holding Nomura Holdings or generate 78.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Nomura Holdings
Performance |
| Timeline |
Dow Jones and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nomura Holdings
Pair trading matchups for Nomura Holdings
Pair Trading with Dow Jones and Nomura Holdings
The main advantage of trading using opposite Dow Jones and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| Nomura Holdings vs. Chiba Bank | Nomura Holdings vs. REVO INSURANCE SPA | Nomura Holdings vs. PT Bank Maybank | Nomura Holdings vs. OAKTRSPECLENDNEW |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |