Correlation Between Innodata and Data Storage
Can any of the company-specific risk be diversified away by investing in both Innodata and Data Storage 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 Data Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innodata and Data Storage Corp, you can compare the effects of market volatilities on Innodata and Data Storage 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 Data Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and Data Storage.
Diversification Opportunities for Innodata and Data Storage
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Innodata and Data is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and Data Storage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Storage Corp 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 Data Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Storage Corp has no effect on the direction of Innodata i.e., Innodata and Data Storage go up and down completely randomly.
Pair Corralation between Innodata and Data Storage
Given the investment horizon of 90 days Innodata is expected to generate 1.5 times less return on investment than Data Storage. But when comparing it to its historical volatility, Innodata is 1.44 times less risky than Data Storage. It trades about 0.08 of its potential returns per unit of risk. Data Storage Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 381.00 in Data Storage Corp on April 25, 2025 and sell it today you would earn a total of 125.00 from holding Data Storage Corp or generate 32.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Innodata vs. Data Storage Corp
Performance |
Timeline |
Innodata |
Data Storage Corp |
Innodata and Data Storage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innodata and Data Storage
The main advantage of trading using opposite Innodata and Data Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innodata position performs unexpectedly, Data Storage 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 Data Storage will offset losses from the drop in Data Storage's long position.Innodata vs. BigBearai Holdings | Innodata vs. FiscalNote Holdings | Innodata vs. Grid Dynamics Holdings | Innodata vs. Innovative Solutions and |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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