Correlation Between Nomura Holdings and Yotta Acquisition

Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and Yotta Acquisition 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 Yotta Acquisition 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 Yotta Acquisition, you can compare the effects of market volatilities on Nomura Holdings and Yotta Acquisition 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 Yotta Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and Yotta Acquisition.

Diversification Opportunities for Nomura Holdings and Yotta Acquisition

0.55

Correlation Coefficient

Nomura Holdings  Yotta Acquisition

Very weak diversification

The 3 months correlation between Nomura and Yotta is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Yotta Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yotta Acquisition 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 Yotta Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yotta Acquisition has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Yotta Acquisition go up and down completely randomly.

Pair Corralation between Nomura Holdings and Yotta Acquisition

Considering the 90-day investment horizon Nomura Holdings ADR is expected to generate 2.59 times more return on investment than Yotta Acquisition. However, Nomura Holdings is 2.59 times more volatile than Yotta Acquisition. It trades about 0.11 of its potential returns per unit of risk. Yotta Acquisition is currently generating about 0.05 per unit of risk. If you would invest  586.00  in Nomura Holdings ADR on December 26, 2024 and sell it today you would earn a total of  70.00  from holding Nomura Holdings ADR or generate 11.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Nomura Holdings ADR  vs.  Yotta Acquisition

Nomura Holdings ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, Nomura Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Yotta Acquisition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yotta Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Yotta Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nomura Holdings and Yotta Acquisition

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

The idea behind Nomura Holdings ADR and Yotta Acquisition 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.