Correlation Between Nomura Holdings and Franklin Credit
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Franklin Credit 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 Franklin Credit 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 Franklin Credit Management, you can compare the effects of market volatilities on Nomura Holdings and Franklin Credit 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 Franklin Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Franklin Credit.
Diversification Opportunities for Nomura Holdings and Franklin Credit
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nomura and Franklin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Franklin Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Credit Mana 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 Franklin Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Credit Mana has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Franklin Credit go up and down completely randomly.
Pair Corralation between Nomura Holdings and Franklin Credit
Considering the 90-day investment horizon Nomura Holdings is expected to generate 4.19 times less return on investment than Franklin Credit. But when comparing it to its historical volatility, Nomura Holdings ADR is 6.93 times less risky than Franklin Credit. It trades about 0.1 of its potential returns per unit of risk. Franklin Credit Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Franklin Credit Management on November 27, 2024 and sell it today you would lose (1.00) from holding Franklin Credit Management or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings ADR vs. Franklin Credit Management
Performance |
| Timeline |
| Nomura Holdings ADR |
| Franklin Credit Mana |
Nomura Holdings and Franklin Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Franklin Credit
The main advantage of trading using opposite Nomura Holdings and Franklin Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Franklin Credit 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 Franklin Credit will offset losses from the drop in Franklin Credit'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 |
| Franklin Credit vs. Ares Dynamic Credit | Franklin Credit vs. PGIM Short Duration | Franklin Credit vs. Ecofin Sustainable And | Franklin Credit vs. Aberdeen Total Dynamic |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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