Correlation Between Innodata and Fiverr International

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

By analyzing existing cross correlation between Innodata and Fiverr International, you can compare the effects of market volatilities on Innodata and Fiverr International 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 Fiverr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innodata and Fiverr International.

Diversification Opportunities for Innodata and Fiverr International

-0.31

Correlation Coefficient

Innodata  Fiverr International

Very good diversification

The 3 months correlation between Innodata and Fiverr is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Innodata and Fiverr International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiverr International 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 Fiverr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiverr International has no effect on the direction of Innodata i.e., Innodata and Fiverr International go up and down completely randomly.

Pair Corralation between Innodata and Fiverr International

Given the investment horizon of 90 days Innodata is expected to generate 2.26 times more return on investment than Fiverr International. However, Innodata is 2.26 times more volatile than Fiverr International. It trades about 0.02 of its potential returns per unit of risk. Fiverr International is currently generating about -0.13 per unit of risk. If you would invest  3,950  in Innodata on January 2, 2025 and sell it today you would lose (296.00) from holding Innodata or give up 7.49% of portfolio value over 90 days.

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

Innodata  vs.  Fiverr International

Innodata

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Innodata are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Innodata may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Fiverr International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiverr International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Innodata and Fiverr International

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

The idea behind Innodata and Fiverr International 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.