Correlation Between 00108WAF7 and Nomura Holdings
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By analyzing existing cross correlation between AEP TEX INC and Nomura Holdings ADR, you can compare the effects of market volatilities on 00108WAF7 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 00108WAF7 with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and Nomura Holdings.
Diversification Opportunities for 00108WAF7 and Nomura Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 00108WAF7 and Nomura is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC 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 00108WAF7 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 AEP TEX INC 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 00108WAF7 i.e., 00108WAF7 and Nomura Holdings go up and down completely randomly.
Pair Corralation between 00108WAF7 and Nomura Holdings
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 2.58 times more return on investment than Nomura Holdings. However, 00108WAF7 is 2.58 times more volatile than Nomura Holdings ADR. It trades about 0.27 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.41 per unit of risk. If you would invest 7,193 in AEP TEX INC on November 3, 2024 and sell it today you would earn a total of 1,028 from holding AEP TEX INC or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.0% |
| Values | Daily Returns |
AEP TEX INC vs. Nomura Holdings ADR
Performance |
| Timeline |
| AEP TEX INC |
| Nomura Holdings ADR |
00108WAF7 and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and Nomura Holdings
The main advantage of trading using opposite 00108WAF7 and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 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.| 00108WAF7 vs. DHI Group | 00108WAF7 vs. United Natural Foods | 00108WAF7 vs. Lianhua Supermarket Holdings | 00108WAF7 vs. Q2 Holdings |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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