Correlation Between Nomura Holdings and Aquestive Therapeutics

Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Aquestive Therapeutics 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 Nomura Holdings and Aquestive Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nomura Holdings ADR and Aquestive Therapeutics, you can compare the effects of market volatilities on Nomura Holdings and Aquestive Therapeutics 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 Nomura Holdings with a short position of Aquestive Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Aquestive Therapeutics.

Diversification Opportunities for Nomura Holdings and Aquestive Therapeutics

-0.59

Correlation Coefficient

Nomura Holdings  Aquestive Therapeutics

Excellent diversification

The 3 months correlation between Nomura and Aquestive is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Aquestive Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquestive Therapeutics and Nomura Holdings 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 Nomura Holdings ADR are associated (or correlated) with Aquestive Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquestive Therapeutics has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Aquestive Therapeutics go up and down completely randomly.

Pair Corralation between Nomura Holdings and Aquestive Therapeutics

Considering the 90-day investment horizon Nomura Holdings is expected to generate 3.28 times less return on investment than Aquestive Therapeutics. But when comparing it to its historical volatility, Nomura Holdings ADR is 2.52 times less risky than Aquestive Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Aquestive Therapeutics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  157.00  in Aquestive Therapeutics on October 4, 2024 and sell it today you would earn a total of  210.00  from holding Aquestive Therapeutics or generate 133.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nomura Holdings ADR  vs.  Aquestive Therapeutics

Nomura Holdings ADR

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Nomura Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aquestive Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquestive Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nomura Holdings and Aquestive Therapeutics

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

The idea behind Nomura Holdings ADR and Aquestive Therapeutics 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 Stocks Directory module to find actively traded stocks across global markets.