Correlation Between Lazard and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Lazard 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 Lazard and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lazard and Nomura Holdings ADR, you can compare the effects of market volatilities on Lazard 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 Lazard with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lazard and Nomura Holdings.
Diversification Opportunities for Lazard and Nomura Holdings
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lazard and Nomura is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lazard 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 Lazard 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 Lazard 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 Lazard i.e., Lazard and Nomura Holdings go up and down completely randomly.
Pair Corralation between Lazard and Nomura Holdings
Considering the 90-day investment horizon Lazard is expected to generate 1.08 times more return on investment than Nomura Holdings. However, Lazard is 1.08 times more volatile than Nomura Holdings ADR. It trades about 0.06 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.06 per unit of risk. If you would invest 3,195 in Lazard on September 13, 2024 and sell it today you would earn a total of 2,209 from holding Lazard or generate 69.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lazard vs. Nomura Holdings ADR
Performance |
| Timeline |
| Lazard |
| Nomura Holdings ADR |
Lazard and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lazard and Nomura Holdings
The main advantage of trading using opposite Lazard and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lazard 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.| Lazard vs. Nomura Holdings ADR | Lazard vs. Scully Royalty | Lazard vs. Oppenheimer Holdings | Lazard vs. Houlihan Lokey |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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