Correlation Between BigBearai Holdings and Innodata
Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and Innodata 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 BigBearai Holdings and Innodata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BigBearai Holdings and Innodata, you can compare the effects of market volatilities on BigBearai Holdings and Innodata 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 BigBearai Holdings with a short position of Innodata. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Innodata.
Diversification Opportunities for BigBearai Holdings and Innodata
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BigBearai and Innodata is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Innodata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innodata has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Innodata go up and down completely randomly.
Pair Corralation between BigBearai Holdings and Innodata
Given the investment horizon of 90 days BigBearai Holdings is expected to generate 2.56 times less return on investment than Innodata. But when comparing it to its historical volatility, BigBearai Holdings is 2.52 times less risky than Innodata. It trades about 0.27 of its potential returns per unit of risk. Innodata is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,049 in Innodata on August 27, 2024 and sell it today you would earn a total of 2,428 from holding Innodata or generate 118.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BigBearai Holdings vs. Innodata
Performance |
| Timeline |
| BigBearai Holdings |
| Innodata |
BigBearai Holdings and Innodata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BigBearai Holdings and Innodata
The main advantage of trading using opposite BigBearai Holdings and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, Innodata 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 Innodata will offset losses from the drop in Innodata's long position.| BigBearai Holdings vs. Innodata | BigBearai Holdings vs. CLPS Inc | BigBearai Holdings vs. ARB IOT Group | BigBearai Holdings vs. FiscalNote Holdings |
| Innodata vs. ASGN Inc | Innodata vs. Formula Systems 1985 | Innodata vs. FiscalNote Holdings | Innodata vs. International Business Machines |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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