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 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
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stifel and Nomura is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Stifel Financial 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 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
Allowing for the 90-day total investment horizon Stifel Financial is expected to generate 1.52 times less return on investment than Nomura Holdings. In addition to that, Stifel Financial is 1.75 times more volatile than Nomura Holdings ADR. It trades about 0.17 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.44 per unit of volatility. If you would invest 511.00 in Nomura Holdings ADR on August 25, 2024 and sell it today you would earn a total of 94.00 from holding Nomura Holdings ADR or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stifel Financial vs. Nomura Holdings ADR
Performance |
| Timeline |
| Stifel Financial |
| 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. Raymond James Financial | Stifel Financial vs. Evercore Partners | Stifel Financial vs. Selective Insurance Group | Stifel Financial vs. Reinsurance Group of |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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