Correlation Between Nomura Holdings and CIFI Holdings

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

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

Diversification Opportunities for Nomura Holdings and CIFI Holdings

-0.31

Correlation Coefficient

Nomura Holdings  CIFI Holdings

Very good diversification

The 3 months correlation between Nomura and CIFI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and CIFI Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIFI Holdings 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 are associated (or correlated) with CIFI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIFI Holdings has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and CIFI Holdings go up and down completely randomly.

Pair Corralation between Nomura Holdings and CIFI Holdings

Assuming the 90 days horizon Nomura Holdings is expected to generate 0.2 times more return on investment than CIFI Holdings. However, Nomura Holdings is 5.03 times less risky than CIFI Holdings. It trades about 0.15 of its potential returns per unit of risk. CIFI Holdings Co is currently generating about -0.07 per unit of risk. If you would invest  481.00  in Nomura Holdings on October 12, 2024 and sell it today you would earn a total of  68.00  from holding Nomura Holdings or generate 14.14% return on investment over 90 days.

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

Nomura Holdings  vs.  CIFI Holdings Co

Nomura Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Nomura Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

CIFI Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CIFI Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nomura Holdings and CIFI Holdings

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

The idea behind Nomura Holdings and CIFI Holdings Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.