Correlation Between Casio Computer and Nomura Holdings

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

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

Diversification Opportunities for Casio Computer and Nomura Holdings

-0.08

Correlation Coefficient

Casio Computer  Nomura Holdings

Good diversification

The 3 months correlation between Casio and Nomura is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Casio Computer Co 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 Casio Computer 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 Casio Computer Co 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 Casio Computer i.e., Casio Computer and Nomura Holdings go up and down completely randomly.

Pair Corralation between Casio Computer and Nomura Holdings

Assuming the 90 days horizon Casio Computer Co is expected to under-perform the Nomura Holdings. In addition to that, Casio Computer is 1.32 times more volatile than Nomura Holdings ADR. It trades about 0.0 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.05 per unit of volatility. If you would invest  375.00  in Nomura Holdings ADR on September 20, 2024 and sell it today you would earn a total of  196.00  from holding Nomura Holdings ADR or generate 52.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Casio Computer Co  vs.  Nomura Holdings ADR

Casio Computer

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Casio Computer Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Casio Computer may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nomura Holdings ADR

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, Nomura Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Casio Computer and Nomura Holdings

The main advantage of trading using opposite Casio Computer and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casio Computer 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 Casio Computer Co 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.