Correlation Between Excel Corp and Innodata

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

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

Diversification Opportunities for Excel Corp and Innodata

0.0

Correlation Coefficient

Excel Corp  Innodata

Pay attention - limited upside

The 3 months correlation between Excel and Innodata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Excel Corp and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and Excel Corp 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 Excel Corp 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 Excel Corp i.e., Excel Corp and Innodata go up and down completely randomly.

Pair Corralation between Excel Corp and Innodata

If you would invest  874.00  in Innodata on February 19, 2024 and sell it today you would earn a total of  327.00  from holding Innodata or generate 37.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Excel Corp  vs.  Innodata

Excel Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Excel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Excel Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Innodata

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innodata are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Innodata exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Excel Corp and Innodata

The main advantage of trading using opposite Excel Corp and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excel Corp 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 Excel Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.