Correlation Between Nomura Holdings and Capgemini
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Capgemini 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 Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings and Capgemini SE, you can compare the effects of market volatilities on Nomura Holdings and Capgemini 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 Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Capgemini.
Diversification Opportunities for Nomura Holdings and Capgemini
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nomura and Capgemini is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE 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 Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Capgemini go up and down completely randomly.
Pair Corralation between Nomura Holdings and Capgemini
Assuming the 90 days horizon Nomura Holdings is expected to generate 0.83 times more return on investment than Capgemini. However, Nomura Holdings is 1.2 times less risky than Capgemini. It trades about 0.57 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.35 per unit of risk. If you would invest 461.00 in Nomura Holdings on August 25, 2024 and sell it today you would earn a total of 104.00 from holding Nomura Holdings or generate 22.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings vs. Capgemini SE
Performance |
| Timeline |
| Nomura Holdings |
| Capgemini SE |
Nomura Holdings and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Capgemini
The main advantage of trading using opposite Nomura Holdings and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Capgemini 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 Capgemini will offset losses from the drop in Capgemini's long position.| Nomura Holdings vs. Macquarie Group Limited | Nomura Holdings vs. MSCI Inc | Nomura Holdings vs. Superior Plus Corp | Nomura Holdings vs. NMI Holdings |
| Capgemini vs. Japan Medical Dynamic | Capgemini vs. Apollo Medical Holdings | Capgemini vs. BE Semiconductor Industries | Capgemini vs. Apyx Medical Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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