Correlation Between Nomura Holdings and Nasdaq
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Nasdaq 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 Nasdaq 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 Nasdaq Inc, you can compare the effects of market volatilities on Nomura Holdings and Nasdaq 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 Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Nasdaq.
Diversification Opportunities for Nomura Holdings and Nasdaq
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nomura and Nasdaq is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc 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 Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Nasdaq go up and down completely randomly.
Pair Corralation between Nomura Holdings and Nasdaq
Considering the 90-day investment horizon Nomura Holdings ADR is expected to generate 1.43 times more return on investment than Nasdaq. However, Nomura Holdings is 1.43 times more volatile than Nasdaq Inc. It trades about 0.06 of its potential returns per unit of risk. Nasdaq Inc is currently generating about 0.07 per unit of risk. If you would invest 407.00 in Nomura Holdings ADR on September 1, 2024 and sell it today you would earn a total of 201.00 from holding Nomura Holdings ADR or generate 49.39% 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. Nasdaq Inc
Performance |
| Timeline |
| Nomura Holdings ADR |
| Nasdaq Inc |
Nomura Holdings and Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Nasdaq
The main advantage of trading using opposite Nomura Holdings and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Nasdaq 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 Nasdaq will offset losses from the drop in Nasdaq'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 |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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