Correlation Between Nomura Holdings and Banco ABC
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Banco ABC 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 Banco ABC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings and Banco ABC Brasil, you can compare the effects of market volatilities on Nomura Holdings and Banco ABC 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 Banco ABC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Banco ABC.
Diversification Opportunities for Nomura Holdings and Banco ABC
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nomura and Banco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Banco ABC Brasil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco ABC Brasil 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 are associated (or correlated) with Banco ABC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco ABC Brasil has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Banco ABC go up and down completely randomly.
Pair Corralation between Nomura Holdings and Banco ABC
Assuming the 90 days trading horizon Nomura Holdings is expected to generate 1.26 times more return on investment than Banco ABC. However, Nomura Holdings is 1.26 times more volatile than Banco ABC Brasil. It trades about 0.08 of its potential returns per unit of risk. Banco ABC Brasil is currently generating about -0.01 per unit of risk. If you would invest 2,642 in Nomura Holdings on November 3, 2024 and sell it today you would earn a total of 1,188 from holding Nomura Holdings or generate 44.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.0% |
| Values | Daily Returns |
Nomura Holdings vs. Banco ABC Brasil
Performance |
| Timeline |
| Nomura Holdings |
| Banco ABC Brasil |
Nomura Holdings and Banco ABC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Banco ABC
The main advantage of trading using opposite Nomura Holdings and Banco ABC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Banco ABC 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 Banco ABC will offset losses from the drop in Banco ABC's long position.| Nomura Holdings vs. CRISPR Therapeutics AG | Nomura Holdings vs. Academy Sports and | Nomura Holdings vs. Brpr Corporate Offices | Nomura Holdings vs. Technos SA |
| Banco ABC vs. Banco do Estado | Banco ABC vs. MAHLE Metal Leve | Banco ABC vs. Tupy SA | Banco ABC vs. BB Seguridade Participacoes |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |