Correlation Between Zhong Yang and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Zhong Yang 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 Zhong Yang and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhong Yang Financial and Nomura Holdings ADR, you can compare the effects of market volatilities on Zhong Yang 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 Zhong Yang with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhong Yang and Nomura Holdings.
Diversification Opportunities for Zhong Yang and Nomura Holdings
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhong and Nomura is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Zhong Yang 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 Zhong Yang 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 Zhong Yang 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 Zhong Yang i.e., Zhong Yang and Nomura Holdings go up and down completely randomly.
Pair Corralation between Zhong Yang and Nomura Holdings
Considering the 90-day investment horizon Zhong Yang Financial is expected to under-perform the Nomura Holdings. In addition to that, Zhong Yang is 2.58 times more volatile than Nomura Holdings ADR. It trades about -0.06 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.4 per unit of volatility. If you would invest 581.00 in Nomura Holdings ADR on November 3, 2024 and sell it today you would earn a total of 64.00 from holding Nomura Holdings ADR or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhong Yang Financial vs. Nomura Holdings ADR
Performance |
| Timeline |
| Zhong Yang Financial |
| Nomura Holdings ADR |
Zhong Yang and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhong Yang and Nomura Holdings
The main advantage of trading using opposite Zhong Yang and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhong Yang 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.| Zhong Yang vs. Netcapital | Zhong Yang vs. Applied Digital | Zhong Yang vs. Magic Empire Global | Zhong Yang vs. Lazard |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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