Correlation Between Virtu Financial and Nomura Holdings
Can any of the company-specific risk be diversified away by investing in both Virtu 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 Virtu 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 Virtu Financial and Nomura Holdings ADR, you can compare the effects of market volatilities on Virtu 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 Virtu Financial with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Nomura Holdings.
Diversification Opportunities for Virtu Financial and Nomura Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtu and Nomura is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Virtu 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 Virtu 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 Virtu 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 Virtu Financial i.e., Virtu Financial and Nomura Holdings go up and down completely randomly.
Pair Corralation between Virtu Financial and Nomura Holdings
Given the investment horizon of 90 days Virtu Financial is expected to generate 1.17 times more return on investment than Nomura Holdings. However, Virtu Financial is 1.17 times more volatile than Nomura Holdings ADR. It trades about 0.16 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.08 per unit of risk. If you would invest 3,487 in Virtu Financial on September 13, 2024 and sell it today you would earn a total of 192.00 from holding Virtu Financial or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Virtu Financial vs. Nomura Holdings ADR
Performance |
| Timeline |
| Virtu Financial |
| Nomura Holdings ADR |
Virtu Financial and Nomura Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtu Financial and Nomura Holdings
The main advantage of trading using opposite Virtu Financial and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu 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.| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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