Correlation Between Sweetgreen and Nomura Holdings

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

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

Diversification Opportunities for Sweetgreen and Nomura Holdings

0.45

Correlation Coefficient

Sweetgreen  Nomura Holdings

Very weak diversification

The 3 months correlation between Sweetgreen and Nomura is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen 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 Sweetgreen 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 Sweetgreen 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 Sweetgreen i.e., Sweetgreen and Nomura Holdings go up and down completely randomly.

Pair Corralation between Sweetgreen and Nomura Holdings

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Nomura Holdings. In addition to that, Sweetgreen is 3.57 times more volatile than Nomura Holdings ADR. It trades about -0.04 of its total potential returns per unit of risk. Nomura Holdings ADR is currently generating about 0.13 per unit of volatility. If you would invest  589.00  in Nomura Holdings ADR on September 12, 2024 and sell it today you would earn a total of  23.00  from holding Nomura Holdings ADR or generate 3.9% return on investment over 90 days.

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

Sweetgreen  vs.  Nomura Holdings ADR

Sweetgreen

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Sweetgreen reported solid returns over the last few months and may actually be approaching a breakup point.

Nomura Holdings ADR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting primary indicators, Nomura Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sweetgreen and Nomura Holdings

The main advantage of trading using opposite Sweetgreen and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen 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 Sweetgreen 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.