Correlation Between Grid Dynamics and Nomura Research

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

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

Diversification Opportunities for Grid Dynamics and Nomura Research

-0.81

Correlation Coefficient

Grid Dynamics  Nomura Research

Pay attention - limited upside

The 3 months correlation between Grid and Nomura is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Grid Dynamics Holdings and Nomura Research Institute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Research Institute and Grid Dynamics 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 Grid Dynamics Holdings are associated (or correlated) with Nomura Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Research Institute has no effect on the direction of Grid Dynamics i.e., Grid Dynamics and Nomura Research go up and down completely randomly.

Pair Corralation between Grid Dynamics and Nomura Research

Given the investment horizon of 90 days Grid Dynamics Holdings is expected to generate 1.5 times more return on investment than Nomura Research. However, Grid Dynamics is 1.5 times more volatile than Nomura Research Institute. It trades about 0.2 of its potential returns per unit of risk. Nomura Research Institute is currently generating about -0.14 per unit of risk. If you would invest  1,382  in Grid Dynamics Holdings on September 17, 2024 and sell it today you would earn a total of  530.00  from holding Grid Dynamics Holdings or generate 38.35% return on investment over 90 days.

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

Grid Dynamics Holdings  vs.  Nomura Research Institute

Grid Dynamics Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grid Dynamics Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Grid Dynamics displayed solid returns over the last few months and may actually be approaching a breakup point.

Nomura Research Institute

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nomura Research Institute has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Grid Dynamics and Nomura Research

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

The idea behind Grid Dynamics Holdings and Nomura Research Institute 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.