Correlation Between NTT DATA and Santacruz Silver

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

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

Diversification Opportunities for NTT DATA and Santacruz Silver

-0.56

Correlation Coefficient

NTT DATA  Santacruz Silver

Excellent diversification

The 3 months correlation between NTT and Santacruz is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NTT DATA and Santacruz Silver Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santacruz Silver Mining and NTT DATA 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 NTT DATA are associated (or correlated) with Santacruz Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santacruz Silver Mining has no effect on the direction of NTT DATA i.e., NTT DATA and Santacruz Silver go up and down completely randomly.

Pair Corralation between NTT DATA and Santacruz Silver

Assuming the 90 days trading horizon NTT DATA is expected to generate 19.58 times less return on investment than Santacruz Silver. But when comparing it to its historical volatility, NTT DATA is 2.8 times less risky than Santacruz Silver. It trades about 0.02 of its potential returns per unit of risk. Santacruz Silver Mining is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Santacruz Silver Mining on October 27, 2024 and sell it today you would earn a total of  3.00  from holding Santacruz Silver Mining or generate 16.67% return on investment over 90 days.

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

NTT DATA   vs.  Santacruz Silver Mining

NTT DATA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NTT DATA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, NTT DATA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Santacruz Silver Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santacruz Silver Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with NTT DATA and Santacruz Silver

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

The idea behind NTT DATA and Santacruz Silver Mining 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.