Correlation Between Nomura Holdings and PennantPark Floating
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and PennantPark Floating 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 PennantPark Floating 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 PennantPark Floating Rate, you can compare the effects of market volatilities on Nomura Holdings and PennantPark Floating 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 PennantPark Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and PennantPark Floating.
Diversification Opportunities for Nomura Holdings and PennantPark Floating
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nomura and PennantPark is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and PennantPark Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Floating Rate 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 PennantPark Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Floating Rate has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and PennantPark Floating go up and down completely randomly.
Pair Corralation between Nomura Holdings and PennantPark Floating
Considering the 90-day investment horizon Nomura Holdings ADR is expected to generate 2.44 times more return on investment than PennantPark Floating. However, Nomura Holdings is 2.44 times more volatile than PennantPark Floating Rate. It trades about 0.08 of its potential returns per unit of risk. PennantPark Floating Rate is currently generating about 0.05 per unit of risk. If you would invest 410.00 in Nomura Holdings ADR on August 25, 2024 and sell it today you would earn a total of 195.00 from holding Nomura Holdings ADR or generate 47.56% 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. PennantPark Floating Rate
Performance |
| Timeline |
| Nomura Holdings ADR |
| PennantPark Floating Rate |
Nomura Holdings and PennantPark Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and PennantPark Floating
The main advantage of trading using opposite Nomura Holdings and PennantPark Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, PennantPark Floating 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 PennantPark Floating will offset losses from the drop in PennantPark Floating'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 |
| PennantPark Floating vs. Gladstone Investment | PennantPark Floating vs. Horizon Technology Finance | PennantPark Floating vs. Stellus Capital Investment | PennantPark Floating vs. Prospect Capital |
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 CEOs Directory module to screen CEOs from public companies around the world.
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