Correlation Between CLARIVATE PLC and Innodata

Can any of the company-specific risk be diversified away by investing in both CLARIVATE PLC and Innodata 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 CLARIVATE PLC and Innodata into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CLARIVATE PLC and Innodata, you can compare the effects of market volatilities on CLARIVATE PLC and Innodata 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 CLARIVATE PLC with a short position of Innodata. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLARIVATE PLC and Innodata.

Diversification Opportunities for CLARIVATE PLC and Innodata

0.88

Correlation Coefficient

CLARIVATE PLC  Innodata

Very poor diversification

The 3 months correlation between CLARIVATE and Innodata is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CLARIVATE PLC and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and CLARIVATE PLC 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 CLARIVATE PLC are associated (or correlated) with Innodata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innodata has no effect on the direction of CLARIVATE PLC i.e., CLARIVATE PLC and Innodata go up and down completely randomly.

Pair Corralation between CLARIVATE PLC and Innodata

Given the investment horizon of 90 days CLARIVATE PLC is expected to under-perform the Innodata. But the stock apears to be less risky and, when comparing its historical volatility, CLARIVATE PLC is 2.15 times less risky than Innodata. The stock trades about -0.13 of its potential returns per unit of risk. The Innodata is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  671.00  in Innodata on February 6, 2024 and sell it today you would earn a total of  13.80  from holding Innodata or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

CLARIVATE PLC  vs.  Innodata

CLARIVATE PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CLARIVATE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Innodata

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innodata has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CLARIVATE PLC and Innodata

The main advantage of trading using opposite CLARIVATE PLC and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLARIVATE PLC position performs unexpectedly, Innodata 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 Innodata will offset losses from the drop in Innodata's long position.

The idea behind CLARIVATE PLC and Innodata pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.