Correlation Between Nomura Holdings and Energisa

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

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

Diversification Opportunities for Nomura Holdings and Energisa

0.0

Correlation Coefficient

Nomura Holdings  Energisa

Pay attention - limited upside

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

Pair Corralation between Nomura Holdings and Energisa

If you would invest (100.00) in Nomura Holdings on February 17, 2024 and sell it today you would earn a total of  100.00  from holding Nomura Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nomura Holdings  vs.  Energisa SA

Nomura Holdings

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Nomura Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Nomura Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Energisa SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energisa SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Nomura Holdings and Energisa

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

The idea behind Nomura Holdings and Energisa SA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.