Correlation Between NYSE Composite and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Nomura Holdings 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 NYSE Composite and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nomura Holdings ADR, you can compare the effects of market volatilities on NYSE Composite and Nomura Holdings 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 NYSE Composite with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nomura Holdings.
Diversification Opportunities for NYSE Composite and Nomura Holdings
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Nomura is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nomura Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings ADR and NYSE Composite 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 NYSE Composite are associated (or correlated) with Nomura Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Holdings ADR has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nomura Holdings go up and down completely randomly.
Pair Corralation between NYSE Composite and Nomura Holdings
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.43 times less return on investment than Nomura Holdings. But when comparing it to its historical volatility, NYSE Composite is 2.81 times less risky than Nomura Holdings. It trades about 0.29 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 518.00 in Nomura Holdings ADR on August 31, 2024 and sell it today you would earn a total of 75.00 from holding Nomura Holdings ADR or generate 14.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nomura Holdings ADR
Performance |
| Timeline |
NYSE Composite and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nomura Holdings ADR
Pair trading matchups for Nomura Holdings
Pair Trading with NYSE Composite and Nomura Holdings
The main advantage of trading using opposite NYSE Composite and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Nomura Holdings 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 Nomura Holdings will offset losses from the drop in Nomura Holdings' long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Nomura Holdings vs. Perella Weinberg Partners | Nomura Holdings vs. Oppenheimer Holdings | Nomura Holdings vs. Stifel Financial Corp | Nomura Holdings vs. Piper Sandler Companies |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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