Correlation Between Innodata and CLPS
Can any of the company-specific risk be diversified away by investing in both Innodata and CLPS 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 CLPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and CLPS Inc, you can compare the effects of market volatilities on Innodata and CLPS 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 CLPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and CLPS.
Diversification Opportunities for Innodata and CLPS
Very good diversification
The 3 months correlation between Innodata and CLPS is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and CLPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLPS Inc 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 CLPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLPS Inc has no effect on the direction of Innodata i.e., Innodata and CLPS go up and down completely randomly.
Pair Corralation between Innodata and CLPS
Given the investment horizon of 90 days Innodata is expected to generate 2.67 times more return on investment than CLPS. However, Innodata is 2.67 times more volatile than CLPS Inc. It trades about 0.3 of its potential returns per unit of risk. CLPS Inc is currently generating about -0.06 per unit of risk. If you would invest 1,897 in Innodata on August 24, 2024 and sell it today you would earn a total of 2,726 from holding Innodata or generate 143.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innodata vs. CLPS Inc
Performance |
| Timeline |
| Innodata |
| CLPS Inc |
Innodata and CLPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and CLPS
The main advantage of trading using opposite Innodata and CLPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, CLPS 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 CLPS will offset losses from the drop in CLPS's long position.| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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