Correlation Between Innodata and Grid Dynamics
Can any of the company-specific risk be diversified away by investing in both Innodata and Grid Dynamics 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 Grid Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and Grid Dynamics Holdings, you can compare the effects of market volatilities on Innodata and Grid Dynamics 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 Grid Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and Grid Dynamics.
Diversification Opportunities for Innodata and Grid Dynamics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innodata and Grid is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and Grid Dynamics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grid Dynamics Holdings 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 Grid Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grid Dynamics Holdings has no effect on the direction of Innodata i.e., Innodata and Grid Dynamics go up and down completely randomly.
Pair Corralation between Innodata and Grid Dynamics
Given the investment horizon of 90 days Innodata is expected to generate 4.32 times more return on investment than Grid Dynamics. However, Innodata is 4.32 times more volatile than Grid Dynamics Holdings. It trades about 0.28 of its potential returns per unit of risk. Grid Dynamics Holdings is currently generating about 0.21 per unit of risk. If you would invest 2,049 in Innodata on August 27, 2024 and sell it today you would earn a total of 2,428 from holding Innodata or generate 118.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innodata vs. Grid Dynamics Holdings
Performance |
| Timeline |
| Innodata |
| Grid Dynamics Holdings |
Innodata and Grid Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and Grid Dynamics
The main advantage of trading using opposite Innodata and Grid Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, Grid Dynamics 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 Grid Dynamics will offset losses from the drop in Grid Dynamics' long position.| Innodata vs. ASGN Inc | Innodata vs. Formula Systems 1985 | Innodata vs. FiscalNote Holdings | Innodata vs. International Business Machines |
| Grid Dynamics vs. ExlService Holdings | Grid Dynamics vs. ASGN Inc | Grid Dynamics vs. WNS Holdings | Grid Dynamics vs. Gartner |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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