Correlation Between Innodata and BG Staffing
Can any of the company-specific risk be diversified away by investing in both Innodata and BG Staffing 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 BG Staffing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and BG Staffing, you can compare the effects of market volatilities on Innodata and BG Staffing 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 BG Staffing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and BG Staffing.
Diversification Opportunities for Innodata and BG Staffing
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innodata and BGSF is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and BG Staffing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Staffing 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 BG Staffing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Staffing has no effect on the direction of Innodata i.e., Innodata and BG Staffing go up and down completely randomly.
Pair Corralation between Innodata and BG Staffing
Given the investment horizon of 90 days Innodata is expected to generate 4.0 times more return on investment than BG Staffing. However, Innodata is 4.0 times more volatile than BG Staffing. It trades about 0.51 of its potential returns per unit of risk. BG Staffing is currently generating about -0.09 per unit of risk. If you would invest 3,319 in Innodata on November 27, 2024 and sell it today you would earn a total of 2,602 from holding Innodata or generate 78.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innodata vs. BG Staffing
Performance |
| Timeline |
| Innodata |
| BG Staffing |
Innodata and BG Staffing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and BG Staffing
The main advantage of trading using opposite Innodata and BG Staffing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, BG Staffing 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 BG Staffing will offset losses from the drop in BG Staffing's long position.| Innodata vs. ASGN Inc | Innodata vs. Formula Systems 1985 | Innodata vs. FiscalNote Holdings | Innodata vs. International Business Machines |
| BG Staffing vs. Kelly Services A | BG Staffing vs. Korn Ferry | BG Staffing vs. Heidrick Struggles International | BG Staffing vs. Hudson Global |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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