Correlation Between Innodata and Alithya
Can any of the company-specific risk be diversified away by investing in both Innodata and Alithya 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 Innodata and Alithya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and Alithya Group, you can compare the effects of market volatilities on Innodata and Alithya 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 Innodata with a short position of Alithya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and Alithya.
Diversification Opportunities for Innodata and Alithya
Modest diversification
The 3 months correlation between Innodata and Alithya is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and Alithya Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alithya Group and Innodata 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 Innodata are associated (or correlated) with Alithya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alithya Group has no effect on the direction of Innodata i.e., Innodata and Alithya go up and down completely randomly.
Pair Corralation between Innodata and Alithya
Given the investment horizon of 90 days Innodata is expected to generate 2.83 times more return on investment than Alithya. However, Innodata is 2.83 times more volatile than Alithya Group. It trades about 0.11 of its potential returns per unit of risk. Alithya Group is currently generating about 0.04 per unit of risk. If you would invest 307.00 in Innodata on August 24, 2024 and sell it today you would earn a total of 4,170 from holding Innodata or generate 1358.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Innodata vs. Alithya Group
Performance |
| Timeline |
| Innodata |
| Alithya Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Innodata and Alithya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and Alithya
The main advantage of trading using opposite Innodata and Alithya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, Alithya 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 Alithya will offset losses from the drop in Alithya's long position.| Innodata vs. ASGN Inc | Innodata vs. Formula Systems 1985 | Innodata vs. FiscalNote Holdings | Innodata vs. International Business Machines |
| Alithya vs. Formula Systems 1985 | Alithya vs. CSP Inc | Alithya vs. Nayax | Alithya vs. Information Services Group |
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 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.
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