Correlation Between Nomura Holdings and Banco BTG
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Banco BTG 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 BTG 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 BTG Pactual, you can compare the effects of market volatilities on Nomura Holdings and Banco BTG 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 BTG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Banco BTG.
Diversification Opportunities for Nomura Holdings and Banco BTG
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nomura and Banco is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Banco BTG Pactual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco BTG Pactual 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 BTG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco BTG Pactual has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Banco BTG go up and down completely randomly.
Pair Corralation between Nomura Holdings and Banco BTG
Assuming the 90 days trading horizon Nomura Holdings is expected to generate 1.39 times more return on investment than Banco BTG. However, Nomura Holdings is 1.39 times more volatile than Banco BTG Pactual. It trades about 0.35 of its potential returns per unit of risk. Banco BTG Pactual is currently generating about 0.07 per unit of risk. If you would invest 2,997 in Nomura Holdings on August 26, 2024 and sell it today you would earn a total of 533.00 from holding Nomura Holdings or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings vs. Banco BTG Pactual
Performance |
| Timeline |
| Nomura Holdings |
| Banco BTG Pactual |
Nomura Holdings and Banco BTG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Banco BTG
The main advantage of trading using opposite Nomura Holdings and Banco BTG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Banco BTG 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 BTG will offset losses from the drop in Banco BTG's long position.| Nomura Holdings vs. Broadcom | Nomura Holdings vs. T Mobile | Nomura Holdings vs. salesforce inc | Nomura Holdings vs. Planet Fitness |
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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