Correlation Between Innodata and Performant Financial
Can any of the company-specific risk be diversified away by investing in both Innodata and Performant Financial 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 Performant Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and Performant Financial, you can compare the effects of market volatilities on Innodata and Performant Financial 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 Performant Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and Performant Financial.
Diversification Opportunities for Innodata and Performant Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innodata and Performant is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and Performant Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performant Financial 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 Performant Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performant Financial has no effect on the direction of Innodata i.e., Innodata and Performant Financial go up and down completely randomly.
Pair Corralation between Innodata and Performant Financial
Given the investment horizon of 90 days Innodata is expected to generate 3.7 times more return on investment than Performant Financial. However, Innodata is 3.7 times more volatile than Performant Financial. It trades about 0.21 of its potential returns per unit of risk. Performant Financial is currently generating about -0.18 per unit of risk. If you would invest 2,143 in Innodata on August 31, 2024 and sell it today you would earn a total of 1,690 from holding Innodata or generate 78.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innodata vs. Performant Financial
Performance |
| Timeline |
| Innodata |
| Performant Financial |
Innodata and Performant Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and Performant Financial
The main advantage of trading using opposite Innodata and Performant Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, Performant Financial 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 Performant Financial will offset losses from the drop in Performant Financial's long position.| Innodata vs. ASGN Inc | Innodata vs. Formula Systems 1985 | Innodata vs. FiscalNote Holdings | Innodata vs. International Business Machines |
| Performant Financial vs. Network 1 Technologies | Performant Financial vs. Wilhelmina | Performant Financial vs. Mader Group Limited | Performant Financial vs. First Advantage Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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