Correlation Between Nomura Holdings and Oji Holdings

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

Diversification Opportunities for Nomura Holdings and Oji Holdings

-0.28

Correlation Coefficient

Nomura Holdings  Oji Holdings

Very good diversification

The 3 months correlation between Nomura and Oji is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and Oji Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oji 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 Oji Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oji Holdings has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Oji Holdings go up and down completely randomly.

Pair Corralation between Nomura Holdings and Oji Holdings

If you would invest  551.00  in Nomura Holdings on September 16, 2024 and sell it today you would earn a total of  7.00  from holding Nomura Holdings or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Nomura Holdings  vs.  Oji Holdings

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 fragile basic indicators, Nomura Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Oji Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oji Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Oji Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nomura Holdings and Oji Holdings

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

The idea behind Nomura Holdings and Oji 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.