Correlation Between Nomura Holdings and Altria
Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Altria 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 Altria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Holdings and Altria Group, you can compare the effects of market volatilities on Nomura Holdings and Altria 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 Altria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Altria.
Diversification Opportunities for Nomura Holdings and Altria
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nomura and Altria is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Altria Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altria Group 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 Altria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altria Group has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Altria go up and down completely randomly.
Pair Corralation between Nomura Holdings and Altria
Assuming the 90 days horizon Nomura Holdings is expected to generate 1.2 times more return on investment than Altria. However, Nomura Holdings is 1.2 times more volatile than Altria Group. It trades about 0.2 of its potential returns per unit of risk. Altria Group is currently generating about -0.15 per unit of risk. If you would invest 566.00 in Nomura Holdings on November 2, 2024 and sell it today you would earn a total of 35.00 from holding Nomura Holdings or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nomura Holdings vs. Altria Group
Performance |
| Timeline |
| Nomura Holdings |
| Altria Group |
Nomura Holdings and Altria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomura Holdings and Altria
The main advantage of trading using opposite Nomura Holdings and Altria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Holdings position performs unexpectedly, Altria 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 Altria will offset losses from the drop in Altria's long position.| Nomura Holdings vs. Air Lease | Nomura Holdings vs. MARKET VECTR RETAIL | Nomura Holdings vs. BJs Wholesale Club | Nomura Holdings vs. COSTCO WHOLESALE CDR |
| Altria vs. Philip Morris International | Altria vs. Philip Morris International | Altria vs. British American Tobacco | Altria vs. British American Tobacco |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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