Correlation Between Nomura Holdings and ASPEN PHARUNADR

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

By analyzing existing cross correlation between Nomura Holdings and ASPEN PHARUNADR 1, you can compare the effects of market volatilities on Nomura Holdings and ASPEN PHARUNADR 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 ASPEN PHARUNADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Holdings and ASPEN PHARUNADR.

Diversification Opportunities for Nomura Holdings and ASPEN PHARUNADR

-0.79

Correlation Coefficient

Nomura Holdings  ASPEN PHARUNADR

Pay attention - limited upside

The 3 months correlation between Nomura and ASPEN is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings and ASPEN PHARUNADR 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN PHARUNADR 1 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 are associated (or correlated) with ASPEN PHARUNADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN PHARUNADR 1 has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and ASPEN PHARUNADR go up and down completely randomly.

Pair Corralation between Nomura Holdings and ASPEN PHARUNADR

Assuming the 90 days horizon Nomura Holdings is expected to generate 1.06 times more return on investment than ASPEN PHARUNADR. However, Nomura Holdings is 1.06 times more volatile than ASPEN PHARUNADR 1. It trades about 0.17 of its potential returns per unit of risk. ASPEN PHARUNADR 1 is currently generating about -0.03 per unit of risk. If you would invest  477.00  in Nomura Holdings on September 14, 2024 and sell it today you would earn a total of  91.00  from holding Nomura Holdings or generate 19.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nomura Holdings  vs.  ASPEN PHARUNADR 1

Nomura Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nomura Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

ASPEN PHARUNADR 1

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASPEN PHARUNADR 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ASPEN PHARUNADR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nomura Holdings and ASPEN PHARUNADR

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

The idea behind Nomura Holdings and ASPEN PHARUNADR 1 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.