Correlation Between Datadog, and Nomura Holdings

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

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

Diversification Opportunities for Datadog, and Nomura Holdings

-0.33

Correlation Coefficient

Datadog,  Nomura Holdings

Very good diversification

The 3 months correlation between Datadog, and Nomura is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Datadog, and Nomura Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Holdings and Datadog, 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 Datadog, 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 has no effect on the direction of Datadog, i.e., Datadog, and Nomura Holdings go up and down completely randomly.

Pair Corralation between Datadog, and Nomura Holdings

Assuming the 90 days trading horizon Datadog, is expected to under-perform the Nomura Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Datadog, is 1.03 times less risky than Nomura Holdings. The stock trades about -0.25 of its potential returns per unit of risk. The Nomura Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,522  in Nomura Holdings on December 26, 2024 and sell it today you would earn a total of  108.00  from holding Nomura Holdings or generate 3.07% return on investment over 90 days.

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

Datadog,  vs.  Nomura Holdings

Datadog,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Datadog, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Nomura Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Datadog, and Nomura Holdings

The main advantage of trading using opposite Datadog, and Nomura Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datadog, 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 Datadog, and Nomura 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.

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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.