Correlation Between Ford and NOMURA
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By analyzing existing cross correlation between Ford Motor and NOMURA HOLDINGS INC, you can compare the effects of market volatilities on Ford and NOMURA 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 Ford with a short position of NOMURA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and NOMURA.
Diversification Opportunities for Ford and NOMURA
Very good diversification
The 3 months correlation between Ford and NOMURA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and NOMURA HOLDINGS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOMURA HOLDINGS INC and Ford 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 Ford Motor are associated (or correlated) with NOMURA. 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 INC has no effect on the direction of Ford i.e., Ford and NOMURA go up and down completely randomly.
Pair Corralation between Ford and NOMURA
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.21 times more return on investment than NOMURA. However, Ford is 1.21 times more volatile than NOMURA HOLDINGS INC. It trades about 0.25 of its potential returns per unit of risk. NOMURA HOLDINGS INC is currently generating about -0.22 per unit of risk. If you would invest 1,008 in Ford Motor on September 2, 2024 and sell it today you would earn a total of 105.00 from holding Ford Motor or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Ford Motor vs. NOMURA HOLDINGS INC
Performance |
| Timeline |
| Ford Motor |
| NOMURA HOLDINGS INC |
Ford and NOMURA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and NOMURA
The main advantage of trading using opposite Ford and NOMURA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, NOMURA 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 will offset losses from the drop in NOMURA's long position.The idea behind Ford Motor and NOMURA HOLDINGS INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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