Correlation Between Nomura Holdings and Magic Empire
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Magic Empire 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 Magic Empire 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 Magic Empire Global, you can compare the effects of market volatilities on Nomura Holdings and Magic Empire 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 Magic Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Magic Empire.
Diversification Opportunities for Nomura Holdings and Magic Empire
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nomura and Magic is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Magic Empire Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Empire Global 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 Magic Empire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Empire Global has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Magic Empire go up and down completely randomly.
Pair Corralation between Nomura Holdings and Magic Empire
Considering the 90-day investment horizon Nomura Holdings is expected to generate 6.15 times less return on investment than Magic Empire. But when comparing it to its historical volatility, Nomura Holdings ADR is 12.23 times less risky than Magic Empire. It trades about 0.25 of its potential returns per unit of risk. Magic Empire Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Magic Empire Global on October 24, 2024 and sell it today you would earn a total of 10.00 from holding Magic Empire Global or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings ADR vs. Magic Empire Global
Performance |
| Timeline |
| Nomura Holdings ADR |
| Magic Empire Global |
Nomura Holdings and Magic Empire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Magic Empire
The main advantage of trading using opposite Nomura Holdings and Magic Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Magic Empire 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 Magic Empire will offset losses from the drop in Magic Empire'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 |
| Magic Empire vs. Netcapital | Magic Empire vs. Applied Digital | Magic Empire vs. Zhong Yang Financial | Magic Empire vs. Mercurity Fintech Holding |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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