Correlation Between Nomura Holdings and Netcapital
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Netcapital 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 Netcapital 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 Netcapital, you can compare the effects of market volatilities on Nomura Holdings and Netcapital 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 Netcapital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Netcapital.
Diversification Opportunities for Nomura Holdings and Netcapital
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nomura and Netcapital is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Netcapital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcapital 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 Netcapital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcapital has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Netcapital go up and down completely randomly.
Pair Corralation between Nomura Holdings and Netcapital
Considering the 90-day investment horizon Nomura Holdings ADR is expected to generate 0.27 times more return on investment than Netcapital. However, Nomura Holdings ADR is 3.64 times less risky than Netcapital. It trades about 0.25 of its potential returns per unit of risk. Netcapital is currently generating about -0.07 per unit of risk. If you would invest 577.00 in Nomura Holdings ADR on October 24, 2024 and sell it today you would earn a total of 35.00 from holding Nomura Holdings ADR or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings ADR vs. Netcapital
Performance |
| Timeline |
| Nomura Holdings ADR |
| Netcapital |
Nomura Holdings and Netcapital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Netcapital
The main advantage of trading using opposite Nomura Holdings and Netcapital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Netcapital 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 Netcapital will offset losses from the drop in Netcapital'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 |
| Netcapital vs. Applied Digital | Netcapital vs. Zhong Yang Financial | Netcapital vs. Magic Empire Global | Netcapital vs. Lazard |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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