Correlation Between Nomura Holdings and Mawson Infrastructure

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

Diversification Opportunities for Nomura Holdings and Mawson Infrastructure

-0.6

Correlation Coefficient

Nomura Holdings  Mawson Infrastructure

Excellent diversification

The 3 months correlation between Nomura and Mawson is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Holdings ADR and Mawson Infrastructure Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawson Infrastructure 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 Mawson Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawson Infrastructure has no effect on the direction of Nomura Holdings i.e., Nomura Holdings and Mawson Infrastructure go up and down completely randomly.

Pair Corralation between Nomura Holdings and Mawson Infrastructure

Considering the 90-day investment horizon Nomura Holdings ADR is expected to under-perform the Mawson Infrastructure. But the stock apears to be less risky and, when comparing its historical volatility, Nomura Holdings ADR is 5.69 times less risky than Mawson Infrastructure. The stock trades about -0.1 of its potential returns per unit of risk. The Mawson Infrastructure Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Mawson Infrastructure Group on February 8, 2024 and sell it today you would lose (13.00) from holding Mawson Infrastructure Group or give up 10.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Nomura Holdings ADR  vs.  Mawson Infrastructure Group

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.

Mawson Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mawson Infrastructure Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Nomura Holdings and Mawson Infrastructure

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

The idea behind Nomura Holdings ADR and Mawson Infrastructure Group 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.