Correlation Between Nomura Holdings and AERWINS Technologies

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

By analyzing existing cross correlation between Nomura Holdings ADR and AERWINS Technologies, you can compare the effects of market volatilities on Nomura Holdings and AERWINS Technologies 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 AERWINS Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and AERWINS Technologies.

Diversification Opportunities for Nomura Holdings and AERWINS Technologies

0.25

Correlation Coefficient

Nomura Holdings  AERWINS Technologies

Modest diversification

The 3 months correlation between Nomura and AERWINS is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and AERWINS Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERWINS Technologies 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 ADR are associated (or correlated) with AERWINS Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERWINS Technologies has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and AERWINS Technologies go up and down completely randomly.

Pair Corralation between Nomura Holdings and AERWINS Technologies

If you would invest  573.00  in Nomura Holdings ADR on September 5, 2024 and sell it today you would earn a total of  52.00  from holding Nomura Holdings ADR or generate 9.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Nomura Holdings ADR  vs.  AERWINS Technologies

Nomura Holdings ADR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 6 (%) 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 January 2025.

AERWINS Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AERWINS Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, AERWINS Technologies is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nomura Holdings and AERWINS Technologies

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

The idea behind Nomura Holdings ADR and AERWINS Technologies 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.