Correlation Between Innodata and Interface
Can any of the company-specific risk be diversified away by investing in both Innodata and Interface 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 Interface into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and Interface, you can compare the effects of market volatilities on Innodata and Interface 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 Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and Interface.
Diversification Opportunities for Innodata and Interface
Very poor diversification
The 3 months correlation between Innodata and Interface is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface 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 Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of Innodata i.e., Innodata and Interface go up and down completely randomly.
Pair Corralation between Innodata and Interface
Given the investment horizon of 90 days Innodata is expected to generate 2.37 times more return on investment than Interface. However, Innodata is 2.37 times more volatile than Interface. It trades about 0.16 of its potential returns per unit of risk. Interface is currently generating about 0.14 per unit of risk. If you would invest 1,728 in Innodata on August 30, 2024 and sell it today you would earn a total of 2,105 from holding Innodata or generate 121.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innodata vs. Interface
Performance |
| Timeline |
| Innodata |
| Interface |
Innodata and Interface Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innodata and Interface
The main advantage of trading using opposite Innodata and Interface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, Interface 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 Interface will offset losses from the drop in Interface's long position.| Innodata vs. ASGN Inc | Innodata vs. Formula Systems 1985 | Innodata vs. FiscalNote Holdings | Innodata vs. International Business Machines |
| Interface vs. Quanex Building Products | Interface vs. Janus International Group | Interface vs. Apogee Enterprises | Interface vs. Gibraltar Industries |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |