Correlation Between Simon Property and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Simon Property 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 Simon Property and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simon Property Group and Nomura Holdings ADR, you can compare the effects of market volatilities on Simon Property 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 Simon Property with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simon Property and Nomura Holdings.
Diversification Opportunities for Simon Property and Nomura Holdings
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Simon and Nomura is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Simon Property Group 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 Simon Property 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 Simon Property Group 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 Simon Property i.e., Simon Property and Nomura Holdings go up and down completely randomly.
Pair Corralation between Simon Property and Nomura Holdings
Considering the 90-day investment horizon Simon Property Group is expected to generate 0.73 times more return on investment than Nomura Holdings. However, Simon Property Group is 1.37 times less risky than Nomura Holdings. It trades about 0.09 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.06 per unit of risk. If you would invest 10,113 in Simon Property Group on November 29, 2024 and sell it today you would earn a total of 8,145 from holding Simon Property Group or generate 80.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simon Property Group vs. Nomura Holdings ADR
Performance |
| Timeline |
| Simon Property Group |
| Nomura Holdings ADR |
Simon Property and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simon Property and Nomura Holdings
The main advantage of trading using opposite Simon Property and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simon Property 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.| Simon Property vs. Federal Realty Investment | Simon Property vs. Agree Realty | Simon Property vs. National Retail Properties | Simon Property vs. Kimco Realty |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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