Correlation Between Nmb Financial and Japan Post

Can any of the company-specific risk be diversified away by investing in both Nmb Financial and Japan Post 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 Nmb Financial and Japan Post into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nmb Financial Corp and Japan Post Holdings, you can compare the effects of market volatilities on Nmb Financial and Japan Post 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 Nmb Financial with a short position of Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nmb Financial and Japan Post.

Diversification Opportunities for Nmb Financial and Japan Post

-0.03

Correlation Coefficient

Nmb Financial  Japan Post

Good diversification

The 3 months correlation between Nmb and Japan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nmb Financial Corp and Japan Post Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Holdings and Nmb 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 Nmb Financial Corp are associated (or correlated) with Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Holdings has no effect on the direction of Nmb Financial i.e., Nmb Financial and Japan Post go up and down completely randomly.

Pair Corralation between Nmb Financial and Japan Post

Given the investment horizon of 90 days Nmb Financial Corp is expected to generate 2.98 times more return on investment than Japan Post. However, Nmb Financial is 2.98 times more volatile than Japan Post Holdings. It trades about 0.06 of its potential returns per unit of risk. Japan Post Holdings is currently generating about -0.03 per unit of risk. If you would invest  1,400  in Nmb Financial Corp on December 20, 2024 and sell it today you would earn a total of  79.00  from holding Nmb Financial Corp or generate 5.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Nmb Financial Corp  vs.  Japan Post Holdings

Nmb Financial Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nmb Financial Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Nmb Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Japan Post Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Japan Post Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Japan Post is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nmb Financial and Japan Post

The main advantage of trading using opposite Nmb Financial and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nmb Financial position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.

The idea behind Nmb Financial Corp and Japan Post Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.