Correlation Between Nomura Holdings and Silvercrest Asset
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Silvercrest Asset 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 Silvercrest Asset 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 Silvercrest Asset Management, you can compare the effects of market volatilities on Nomura Holdings and Silvercrest Asset 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 Silvercrest Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Silvercrest Asset.
Diversification Opportunities for Nomura Holdings and Silvercrest Asset
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nomura and Silvercrest is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Silvercrest Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silvercrest Asset 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 Silvercrest Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silvercrest Asset has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Silvercrest Asset go up and down completely randomly.
Pair Corralation between Nomura Holdings and Silvercrest Asset
Considering the 90-day investment horizon Nomura Holdings ADR is expected to generate 0.99 times more return on investment than Silvercrest Asset. However, Nomura Holdings ADR is 1.01 times less risky than Silvercrest Asset. It trades about 0.08 of its potential returns per unit of risk. Silvercrest Asset Management is currently generating about 0.03 per unit of risk. If you would invest 384.00 in Nomura Holdings ADR on September 19, 2024 and sell it today you would earn a total of 185.00 from holding Nomura Holdings ADR or generate 48.18% 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. Silvercrest Asset Management
Performance |
Timeline |
Nomura Holdings ADR |
Silvercrest Asset |
Nomura Holdings and Silvercrest Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nomura Holdings and Silvercrest Asset
The main advantage of trading using opposite Nomura Holdings and Silvercrest Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Silvercrest Asset 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 Silvercrest Asset will offset losses from the drop in Silvercrest Asset'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 |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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