Correlation Between Nomura Research and Bill Holdings

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Can any of the company-specific risk be diversified away by investing in both Nomura Research and Bill 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 Nomura Research and Bill Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomura Research Institute and Bill Holdings, you can compare the effects of market volatilities on Nomura Research and Bill 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 Nomura Research with a short position of Bill Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomura Research and Bill Holdings.

Diversification Opportunities for Nomura Research and Bill Holdings

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Nomura and Bill Holdings is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Research Institute and Bill Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Holdings and Nomura Research 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 Research Institute are associated (or correlated) with Bill Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Holdings has no effect on the direction of Nomura Research i.e., Nomura Research and Bill Holdings go up and down completely randomly.

Pair Corralation between Nomura Research and Bill Holdings

Assuming the 90 days horizon Nomura Research Institute is expected to generate 4.28 times more return on investment than Bill Holdings. However, Nomura Research is 4.28 times more volatile than Bill Holdings. It trades about 0.06 of its potential returns per unit of risk. Bill Holdings is currently generating about 0.02 per unit of risk. If you would invest  401.00  in Nomura Research Institute on August 31, 2022 and sell it today you would earn a total of  1,954  from holding Nomura Research Institute or generate 487.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Nomura Research Institute  vs.  Bill Holdings

 Performance (%) 
       Timeline  
Nomura Research Institute 
Nomura Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Research Institute are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish basic indicators, Nomura Research exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nomura Price Channel

Bill Holdings 
Bill Holdings Performance
0 of 100
Over the last 90 days Bill Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's essential indicators remain relatively steady which may send shares a bit higher in December 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Bill Holdings Price Channel

Nomura Research and Bill Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nomura Research and Bill Holdings

The main advantage of trading using opposite Nomura Research and Bill Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomura Research position performs unexpectedly, Bill 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 Bill Holdings will offset losses from the drop in Bill Holdings' long position.
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The idea behind Nomura Research Institute and Bill Holdings 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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Check out your portfolio center. 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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