Correlation Between 98313RAD8 and Nomura Holdings

Can any of the company-specific risk be diversified away by investing in both 98313RAD8 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 98313RAD8 and Nomura Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wynn Macau 55 and Nomura Holdings ADR, you can compare the effects of market volatilities on 98313RAD8 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 98313RAD8 with a short position of Nomura Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 98313RAD8 and Nomura Holdings.

Diversification Opportunities for 98313RAD8 and Nomura Holdings

-0.03

Correlation Coefficient

98313RAD8  Nomura Holdings

Good diversification

The 3 months correlation between 98313RAD8 and Nomura is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Wynn Macau 55 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 98313RAD8 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 Wynn Macau 55 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 98313RAD8 i.e., 98313RAD8 and Nomura Holdings go up and down completely randomly.

Pair Corralation between 98313RAD8 and Nomura Holdings

Assuming the 90 days trading horizon Wynn Macau 55 is expected to generate 3.67 times more return on investment than Nomura Holdings. However, 98313RAD8 is 3.67 times more volatile than Nomura Holdings ADR. It trades about 0.32 of its potential returns per unit of risk. Nomura Holdings ADR is currently generating about -0.24 per unit of risk. If you would invest  8,675  in Wynn Macau 55 on October 8, 2024 and sell it today you would earn a total of  1,075  from holding Wynn Macau 55 or generate 12.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	52.63%
Values	Daily Returns

Wynn Macau 55  vs.  Nomura Holdings ADR

Wynn Macau 55

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Macau 55 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 98313RAD8 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 98313RAD8 and Nomura Holdings

The main advantage of trading using opposite 98313RAD8 and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 98313RAD8 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 Wynn Macau 55 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.