Correlation Between Nomura Holdings and Banestes
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Banestes 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 Banestes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings and Banestes SA , you can compare the effects of market volatilities on Nomura Holdings and Banestes 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 Banestes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Banestes.
Diversification Opportunities for Nomura Holdings and Banestes
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nomura and Banestes is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Banestes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banestes SA 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 Banestes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banestes SA has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Banestes go up and down completely randomly.
Pair Corralation between Nomura Holdings and Banestes
Assuming the 90 days trading horizon Nomura Holdings is expected to generate 1.72 times more return on investment than Banestes. However, Nomura Holdings is 1.72 times more volatile than Banestes SA . It trades about 0.07 of its potential returns per unit of risk. Banestes SA is currently generating about 0.07 per unit of risk. If you would invest 2,114 in Nomura Holdings on November 4, 2024 and sell it today you would earn a total of 1,716 from holding Nomura Holdings or generate 81.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.12% |
| Values | Daily Returns |
Nomura Holdings vs. Banestes SA
Performance |
| Timeline |
| Nomura Holdings |
| Banestes SA |
Nomura Holdings and Banestes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Banestes
The main advantage of trading using opposite Nomura Holdings and Banestes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Banestes 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 Banestes will offset losses from the drop in Banestes' long position.| Nomura Holdings vs. Nordon Indstrias Metalrgicas | Nomura Holdings vs. Bread Financial Holdings | Nomura Holdings vs. Costco Wholesale | Nomura Holdings vs. Capital One Financial |
| Banestes vs. Banestes SA | Banestes vs. Banco da Amaznia | Banestes vs. Banco ABC Brasil | Banestes vs. Banco do Estado |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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