Correlation Between Stifel Financial and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Stifel Financial 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 Stifel Financial and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stifel Financial Corp and Nomura Holdings ADR, you can compare the effects of market volatilities on Stifel Financial 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 Stifel Financial with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stifel Financial and Nomura Holdings.
Diversification Opportunities for Stifel Financial and Nomura Holdings
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stifel and Nomura is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial Corp 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 Stifel Financial 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 Stifel Financial Corp 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 Stifel Financial i.e., Stifel Financial and Nomura Holdings go up and down completely randomly.
Pair Corralation between Stifel Financial and Nomura Holdings
Assuming the 90 days horizon Stifel Financial Corp is expected to under-perform the Nomura Holdings. But the preferred stock apears to be less risky and, when comparing its historical volatility, Stifel Financial Corp is 4.2 times less risky than Nomura Holdings. The preferred stock trades about -0.03 of its potential returns per unit of risk. The Nomura Holdings ADR is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 517.00 in Nomura Holdings ADR on August 29, 2024 and sell it today you would earn a total of 80.00 from holding Nomura Holdings ADR or generate 15.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stifel Financial Corp vs. Nomura Holdings ADR
Performance |
| Timeline |
| Stifel Financial Corp |
| Nomura Holdings ADR |
Stifel Financial and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stifel Financial and Nomura Holdings
The main advantage of trading using opposite Stifel Financial and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stifel Financial 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.| Stifel Financial vs. Morgan Stanley | Stifel Financial vs. The Goldman Sachs | Stifel Financial vs. SCE Trust IV |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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