Correlation Between PowerUp Acquisition and Nomura Holdings

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

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

Diversification Opportunities for PowerUp Acquisition and Nomura Holdings

0.55

Correlation Coefficient

PowerUp Acquisition  Nomura Holdings

Very weak diversification

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

Pair Corralation between PowerUp Acquisition and Nomura Holdings

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 11.42 times more return on investment than Nomura Holdings. However, PowerUp Acquisition is 11.42 times more volatile than Nomura Holdings ADR. It trades about 0.21 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.07 per unit of risk. If you would invest  1.95  in PowerUp Acquisition Corp on November 28, 2024 and sell it today you would earn a total of  4.60  from holding PowerUp Acquisition Corp or generate 235.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	84.48%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  Nomura Holdings ADR

PowerUp Acquisition Corp

Risk-Adjusted Performance

Solid

Over the last 90 days PowerUp Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, PowerUp Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Nomura Holdings ADR

Risk-Adjusted Performance

Modest

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 March 2025.

Pair Trading with PowerUp Acquisition and Nomura Holdings

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

The idea behind PowerUp Acquisition Corp and Nomura Holdings ADR 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..