Correlation Between Nomura Research and Perficient

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

Diversification Opportunities for Nomura Research and Perficient

-0.62

Correlation Coefficient

Nomura Research  Perficient

Excellent diversification

The 3 months correlation between Nomura and Perficient is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nomura Research Institute and Perficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perficient 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 Perficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perficient has no effect on the direction of Nomura Research i.e., Nomura Research and Perficient go up and down completely randomly.

Pair Corralation between Nomura Research and Perficient

Assuming the 90 days horizon Nomura Research is expected to generate 1.05 times less return on investment than Perficient. But when comparing it to its historical volatility, Nomura Research Institute is 2.03 times less risky than Perficient. It trades about 0.04 of its potential returns per unit of risk. Perficient is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  7,000  in Perficient on September 17, 2024 and sell it today you would earn a total of  596.00  from holding Perficient or generate 8.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.52%
Values	Daily Returns

Nomura Research Institute  vs.  Perficient

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.

Perficient

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Perficient is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nomura Research and Perficient

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

The idea behind Nomura Research Institute and Perficient 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.