Correlation Between INTNED and Nomura Holdings

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

By analyzing existing cross correlation between INTNED 4017 28 MAR 28 and Nomura Holdings ADR, you can compare the effects of market volatilities on INTNED 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 INTNED with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTNED and Nomura Holdings.

Diversification Opportunities for INTNED and Nomura Holdings

-0.26

Correlation Coefficient

INTNED  Nomura Holdings

Very good diversification

The 3 months correlation between INTNED and Nomura is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding INTNED 4017 28 MAR 28 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 INTNED 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 INTNED 4017 28 MAR 28 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 INTNED i.e., INTNED and Nomura Holdings go up and down completely randomly.

Pair Corralation between INTNED and Nomura Holdings

Assuming the 90 days trading horizon INTNED 4017 28 MAR 28 is expected to under-perform the Nomura Holdings. But the bond apears to be less risky and, when comparing its historical volatility, INTNED 4017 28 MAR 28 is 1.13 times less risky than Nomura Holdings. The bond trades about -0.28 of its potential returns per unit of risk. The Nomura Holdings ADR is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest  610.00  in Nomura Holdings ADR on October 8, 2024 and sell it today you would lose (29.00) from holding Nomura Holdings ADR or give up 4.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.95%
Values	Daily Returns

INTNED 4017 28 MAR 28  vs.  Nomura Holdings ADR

INTNED 4017 28

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 4017 28 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Nomura Holdings ADR

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 7 (%) 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.

Pair Trading with INTNED and Nomura Holdings

The main advantage of trading using opposite INTNED and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTNED 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 INTNED 4017 28 MAR 28 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.