Correlation Between Nomura Holdings and Premier Hldg

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

Diversification Opportunities for Nomura Holdings and Premier Hldg

0.0

Correlation Coefficient

Nomura Holdings  Premier Hldg

Pay attention - limited upside

The 3 months correlation between Nomura and Premier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Premier Hldg Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Hldg Corp 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 Premier Hldg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Hldg Corp has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Premier Hldg go up and down completely randomly.

Pair Corralation between Nomura Holdings and Premier Hldg

If you would invest  0.01  in Premier Hldg Corp on February 9, 2024 and sell it today you would earn a total of  0.00  from holding Premier Hldg Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Nomura Holdings ADR  vs.  Premier Hldg Corp

Nomura Holdings ADR

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings ADR are ranked lower than 7 (%) 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 June 2024.

Premier Hldg Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premier Hldg Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Premier Hldg is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Nomura Holdings and Premier Hldg

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

The idea behind Nomura Holdings ADR and Premier Hldg Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.