Correlation Between Open Text and Information Services

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

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

Diversification Opportunities for Open Text and Information Services

0.52

Correlation Coefficient

Open Text  Information Services

Very weak diversification

The 3 months correlation between Open and Information is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Open Text Corp and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services and Open Text 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 Open Text Corp are associated (or correlated) with Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Open Text i.e., Open Text and Information Services go up and down completely randomly.

Pair Corralation between Open Text and Information Services

Assuming the 90 days trading horizon Open Text is expected to generate 2.39 times less return on investment than Information Services. In addition to that, Open Text is 1.95 times more volatile than Information Services. It trades about 0.05 of its total potential returns per unit of risk. Information Services is currently generating about 0.23 per unit of volatility. If you would invest  2,772  in Information Services on May 15, 2025 and sell it today you would earn a total of  428.00  from holding Information Services or generate 15.44% return on investment over 90 days.

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

Open Text Corp  vs.  Information Services

Open Text Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Open Text Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Open Text may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Information Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Information Services are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Information Services displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Open Text and Information Services

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

The idea behind Open Text Corp and Information Services 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.