Correlation Between Nomura Holdings and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Banco Santander 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 Santander 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 Santander Chile, you can compare the effects of market volatilities on Nomura Holdings and Banco Santander 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 Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Banco Santander.
Diversification Opportunities for Nomura Holdings and Banco Santander
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nomura and Banco is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Banco Santander Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Chile 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 Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander Chile has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Banco Santander go up and down completely randomly.
Pair Corralation between Nomura Holdings and Banco Santander
Assuming the 90 days trading horizon Nomura Holdings is expected to generate 1.65 times more return on investment than Banco Santander. However, Nomura Holdings is 1.65 times more volatile than Banco Santander Chile. It trades about 0.07 of its potential returns per unit of risk. Banco Santander Chile is currently generating about 0.05 per unit of risk. If you would invest 2,030 in Nomura Holdings on August 26, 2024 and sell it today you would earn a total of 1,500 from holding Nomura Holdings or generate 73.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.58% |
| Values | Daily Returns |
Nomura Holdings vs. Banco Santander Chile
Performance |
| Timeline |
| Nomura Holdings |
| Banco Santander Chile |
Nomura Holdings and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Banco Santander
The main advantage of trading using opposite Nomura Holdings and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Banco Santander 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 Santander will offset losses from the drop in Banco Santander's long position.| Nomura Holdings vs. Waste Management | Nomura Holdings vs. METISA Metalrgica Timboense | Nomura Holdings vs. New Oriental Education | Nomura Holdings vs. Micron Technology |
| Banco Santander vs. Agilent Technologies | Banco Santander vs. United Rentals | Banco Santander vs. Cognizant Technology Solutions | Banco Santander vs. Lupatech SA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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