Correlation Between Nomura Holdings and PLBIIJ

Can any of the company-specific risk be diversified away by investing in both Nomura Holdings and PLBIIJ 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 PLBIIJ 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 PLBIIJ 425 05 MAY 25, you can compare the effects of market volatilities on Nomura Holdings and PLBIIJ 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 PLBIIJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and PLBIIJ.

Diversification Opportunities for Nomura Holdings and PLBIIJ

0.51

Correlation Coefficient

Nomura Holdings  PLBIIJ

Very weak diversification

The 3 months correlation between Nomura and PLBIIJ is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and PLBIIJ 425 05 MAY 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLBIIJ 425 05 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 PLBIIJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLBIIJ 425 05 has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and PLBIIJ go up and down completely randomly.

Pair Corralation between Nomura Holdings and PLBIIJ

Considering the 90-day investment horizon Nomura Holdings ADR is expected to generate 1.22 times more return on investment than PLBIIJ. However, Nomura Holdings is 1.22 times more volatile than PLBIIJ 425 05 MAY 25. It trades about 0.03 of its potential returns per unit of risk. PLBIIJ 425 05 MAY 25 is currently generating about -0.31 per unit of risk. If you would invest  590.00  in Nomura Holdings ADR on September 15, 2024 and sell it today you would earn a total of  4.00  from holding Nomura Holdings ADR or generate 0.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	31.82%
Values	Daily Returns

Nomura Holdings ADR  vs.  PLBIIJ 425 05 MAY 25

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 conflicting primary indicators, Nomura Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PLBIIJ 425 05

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLBIIJ 425 05 MAY 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PLBIIJ 425 05 MAY 25 investors.

Pair Trading with Nomura Holdings and PLBIIJ

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

The idea behind Nomura Holdings ADR and PLBIIJ 425 05 MAY 25 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.