Correlation Between Nomura Holdings and Aehr Test
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Aehr Test 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 Nomura Holdings and Aehr Test into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings ADR and Aehr Test Systems, you can compare the effects of market volatilities on Nomura Holdings and Aehr Test 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 Nomura Holdings with a short position of Aehr Test. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Aehr Test.
Diversification Opportunities for Nomura Holdings and Aehr Test
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nomura and Aehr is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Aehr Test Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aehr Test Systems and Nomura Holdings 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 Nomura Holdings ADR are associated (or correlated) with Aehr Test. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aehr Test Systems has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Aehr Test go up and down completely randomly.
Pair Corralation between Nomura Holdings and Aehr Test
Considering the 90-day investment horizon Nomura Holdings ADR is expected to generate 0.41 times more return on investment than Aehr Test. However, Nomura Holdings ADR is 2.46 times less risky than Aehr Test. It trades about 0.08 of its potential returns per unit of risk. Aehr Test Systems is currently generating about -0.03 per unit of risk. If you would invest 421.00 in Nomura Holdings ADR on September 4, 2024 and sell it today you would earn a total of 196.00 from holding Nomura Holdings ADR or generate 46.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings ADR vs. Aehr Test Systems
Performance |
| Timeline |
| Nomura Holdings ADR |
| Aehr Test Systems |
Nomura Holdings and Aehr Test Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Aehr Test
The main advantage of trading using opposite Nomura Holdings and Aehr Test positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Aehr Test 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 Aehr Test will offset losses from the drop in Aehr Test's long position.| Nomura Holdings vs. Perella Weinberg Partners | Nomura Holdings vs. Oppenheimer Holdings | Nomura Holdings vs. Stifel Financial Corp | Nomura Holdings vs. Piper Sandler Companies |
| Aehr Test vs. Photronics | Aehr Test vs. Lam Research Corp | Aehr Test vs. KLA Tencor | Aehr Test vs. Kulicke and Soffa |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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