Correlation Between Cannae Holdings and INAQW Old

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

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

Diversification Opportunities for Cannae Holdings and INAQW Old

0.06

Correlation Coefficient

Cannae Holdings  INAQW Old

Significant diversification

The 3 months correlation between Cannae and INAQW is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and INAQW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INAQW Old and Cannae Holdings 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 Cannae Holdings are associated (or correlated) with INAQW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INAQW Old has no effect on the direction of Cannae Holdings i.e., Cannae Holdings and INAQW Old go up and down completely randomly.

Pair Corralation between Cannae Holdings and INAQW Old

Given the investment horizon of 90 days Cannae Holdings is expected to under-perform the INAQW Old. But the stock apears to be less risky and, when comparing its historical volatility, Cannae Holdings is 41.25 times less risky than INAQW Old. The stock trades about 0.0 of its potential returns per unit of risk. The INAQW Old is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  13.00  in INAQW Old on October 26, 2024 and sell it today you would earn a total of  0.00  from holding INAQW Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	59.32%
Values	Daily Returns

Cannae Holdings  vs.  INAQW Old

Cannae Holdings

Risk-Adjusted Performance

0 of 100

Weak

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

INAQW Old

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days INAQW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile basic indicators, INAQW Old showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cannae Holdings and INAQW Old

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

The idea behind Cannae Holdings and INAQW Old 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.