Correlation Between Nomura Holdings and Ming Le
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Ming Le 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 Ming Le into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings and Ming Le Sports, you can compare the effects of market volatilities on Nomura Holdings and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Ming Le.
Diversification Opportunities for Nomura Holdings and Ming Le
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nomura and Ming is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Ming Le go up and down completely randomly.
Pair Corralation between Nomura Holdings and Ming Le
Assuming the 90 days horizon Nomura Holdings is expected to generate 0.63 times more return on investment than Ming Le. However, Nomura Holdings is 1.58 times less risky than Ming Le. It trades about -0.05 of its potential returns per unit of risk. Ming Le Sports is currently generating about -0.38 per unit of risk. If you would invest 562.00 in Nomura Holdings on September 22, 2024 and sell it today you would lose (10.00) from holding Nomura Holdings or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomura Holdings vs. Ming Le Sports
Performance |
| Timeline |
| Nomura Holdings |
| Ming Le Sports |
Nomura Holdings and Ming Le Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Ming Le
The main advantage of trading using opposite Nomura Holdings and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.| Nomura Holdings vs. Morgan Stanley | Nomura Holdings vs. Morgan Stanley | Nomura Holdings vs. The Charles Schwab | Nomura Holdings vs. The Goldman Sachs |
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 Stocks Directory module to find actively traded stocks across global markets.
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