Correlation Between Innovative Solutions and Cadre Holdings
Can any of the company-specific risk be diversified away by investing in both Innovative Solutions and Cadre Holdings 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 Innovative Solutions and Cadre Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Solutions and and Cadre Holdings, you can compare the effects of market volatilities on Innovative Solutions and Cadre Holdings 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 Innovative Solutions with a short position of Cadre Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Solutions and Cadre Holdings.
Diversification Opportunities for Innovative Solutions and Cadre Holdings
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innovative and Cadre is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Solutions and and Cadre Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadre Holdings and Innovative Solutions 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 Innovative Solutions and are associated (or correlated) with Cadre Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadre Holdings has no effect on the direction of Innovative Solutions i.e., Innovative Solutions and Cadre Holdings go up and down completely randomly.
Pair Corralation between Innovative Solutions and Cadre Holdings
Given the investment horizon of 90 days Innovative Solutions and is expected to generate 1.71 times more return on investment than Cadre Holdings. However, Innovative Solutions is 1.71 times more volatile than Cadre Holdings. It trades about 0.45 of its potential returns per unit of risk. Cadre Holdings is currently generating about 0.46 per unit of risk. If you would invest 800.00 in Innovative Solutions and on October 23, 2024 and sell it today you would earn a total of 281.00 from holding Innovative Solutions and or generate 35.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Solutions and vs. Cadre Holdings
Performance |
| Timeline |
| Innovative Solutions and |
| Cadre Holdings |
Innovative Solutions and Cadre Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Solutions and Cadre Holdings
The main advantage of trading using opposite Innovative Solutions and Cadre Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Solutions position performs unexpectedly, Cadre Holdings 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 Cadre Holdings will offset losses from the drop in Cadre Holdings' long position.| Innovative Solutions vs. Novocure | Innovative Solutions vs. HubSpot | Innovative Solutions vs. DigitalOcean Holdings | Innovative Solutions vs. Appian Corp |
| Cadre Holdings vs. European Wax Center | Cadre Holdings vs. Enfusion | Cadre Holdings vs. CiT Inc | Cadre Holdings vs. Core Main |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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