Correlation Between CACI International and Innodata
Can any of the company-specific risk be diversified away by investing in both CACI International 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 CACI International and Innodata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CACI International and Innodata, you can compare the effects of market volatilities on CACI International 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 CACI International with a short position of Innodata. Check out your portfolio center. Please also check ongoing floating volatility patterns of CACI International and Innodata.
Diversification Opportunities for CACI International and Innodata
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CACI and Innodata is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding CACI International and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and CACI International 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 CACI International 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 CACI International i.e., CACI International and Innodata go up and down completely randomly.
Pair Corralation between CACI International and Innodata
Given the investment horizon of 90 days CACI International is expected to generate 0.55 times more return on investment than Innodata. However, CACI International is 1.81 times less risky than Innodata. It trades about -0.11 of its potential returns per unit of risk. Innodata is currently generating about -0.12 per unit of risk. If you would invest 42,014 in CACI International on November 4, 2024 and sell it today you would lose (3,388) from holding CACI International or give up 8.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CACI International vs. Innodata
Performance |
| Timeline |
| CACI International |
| Innodata |
CACI International and Innodata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CACI International and Innodata
The main advantage of trading using opposite CACI International and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CACI International 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.| CACI International vs. Leidos Holdings | CACI International vs. Parsons Corp | CACI International vs. ASGN Inc | CACI International vs. ExlService 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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