Correlation Between Innodata and Brinks
Can any of the company-specific risk be diversified away by investing in both Innodata and Brinks 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 Brinks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and Brinks Company, you can compare the effects of market volatilities on Innodata and Brinks 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 Brinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and Brinks.
Diversification Opportunities for Innodata and Brinks
Pay attention - limited upside
The 3 months correlation between Innodata and Brinks is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and Brinks Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brinks Company 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 Brinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brinks Company has no effect on the direction of Innodata i.e., Innodata and Brinks go up and down completely randomly.
Pair Corralation between Innodata and Brinks
Given the investment horizon of 90 days Innodata is expected to generate 10.43 times more return on investment than Brinks. However, Innodata is 10.43 times more volatile than Brinks Company. It trades about 0.28 of its potential returns per unit of risk. Brinks Company is currently generating about -0.12 per unit of risk. If you would invest 2,049 in Innodata on August 28, 2024 and sell it today you would earn a total of 2,490 from holding Innodata or generate 121.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innodata vs. Brinks Company
Performance |
| Timeline |
| Innodata |
| Brinks Company |
Innodata and Brinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and Brinks
The main advantage of trading using opposite Innodata and Brinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, Brinks 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 Brinks will offset losses from the drop in Brinks' long position.| Innodata vs. ASGN Inc | Innodata vs. Formula Systems 1985 | Innodata vs. FiscalNote Holdings | Innodata vs. International Business Machines |
| Brinks vs. Park Electrochemical | Brinks vs. Innovative Solutions and | Brinks vs. Curtiss Wright | Brinks vs. National Presto Industries |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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