Correlation Between Indra Sistemas and Nomura Research

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

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

Diversification Opportunities for Indra Sistemas and Nomura Research

0.78

Correlation Coefficient

Indra Sistemas  Nomura Research

Poor diversification

The 3 months correlation between Indra and Nomura is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Indra Sistemas SA 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 Indra Sistemas 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 Indra Sistemas SA 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 Indra Sistemas i.e., Indra Sistemas and Nomura Research go up and down completely randomly.

Pair Corralation between Indra Sistemas and Nomura Research

Assuming the 90 days horizon Indra Sistemas SA is expected to generate 1.47 times more return on investment than Nomura Research. However, Indra Sistemas is 1.47 times more volatile than Nomura Research Institute. It trades about 0.03 of its potential returns per unit of risk. Nomura Research Institute is currently generating about 0.04 per unit of risk. If you would invest  716.00  in Indra Sistemas SA on September 26, 2024 and sell it today you would earn a total of  137.00  from holding Indra Sistemas SA or generate 19.13% return on investment over 90 days.

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

Indra Sistemas SA  vs.  Nomura Research Institute

Indra Sistemas SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indra Sistemas SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 fragile 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 Indra Sistemas and Nomura Research

The main advantage of trading using opposite Indra Sistemas and Nomura Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indra Sistemas 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 Indra Sistemas SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.