Correlation Between Fidelity National and Innodata

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

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

Diversification Opportunities for Fidelity National and Innodata

-0.85

Correlation Coefficient

Fidelity National  Innodata

Pay attention - limited upside

The 3 months correlation between Fidelity and Innodata is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Innodata go up and down completely randomly.

Pair Corralation between Fidelity National and Innodata

Considering the 90-day investment horizon Fidelity National Information is expected to under-perform the Innodata. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 3.42 times less risky than Innodata. The stock trades about -0.08 of its potential returns per unit of risk. The Innodata is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  686.00  in Innodata on February 5, 2024 and sell it today you would lose (14.00) from holding Innodata or give up 2.04% of portfolio value over 90 days.

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

Fidelity National Information  vs.  Innodata

Fidelity National

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Fidelity National unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Fidelity National and Innodata

The main advantage of trading using opposite Fidelity National and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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 Fidelity National Information 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.