Correlation Between Innodata and CSP
Can any of the company-specific risk be diversified away by investing in both Innodata and CSP 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 CSP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and CSP Inc, you can compare the effects of market volatilities on Innodata and CSP 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 CSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and CSP.
Diversification Opportunities for Innodata and CSP
Very weak diversification
The 3 months correlation between Innodata and CSP is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and CSP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP 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 CSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Inc has no effect on the direction of Innodata i.e., Innodata and CSP go up and down completely randomly.
Pair Corralation between Innodata and CSP
Given the investment horizon of 90 days Innodata is expected to generate 1.32 times more return on investment than CSP. However, Innodata is 1.32 times more volatile than CSP Inc. It trades about 0.09 of its potential returns per unit of risk. CSP Inc is currently generating about 0.08 per unit of risk. If you would invest 1,071 in Innodata on August 28, 2024 and sell it today you would earn a total of 3,468 from holding Innodata or generate 323.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innodata vs. CSP Inc
Performance |
| Timeline |
| Innodata |
| CSP Inc |
Innodata and CSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and CSP
The main advantage of trading using opposite Innodata and CSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, CSP 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 CSP will offset losses from the drop in CSP'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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |