Correlation Between Oceanpal and Innodata

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

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

Diversification Opportunities for Oceanpal and Innodata

-0.3

Correlation Coefficient

Oceanpal  Innodata

Very good diversification

The 3 months correlation between Oceanpal and Innodata is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Oceanpal and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and Oceanpal 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 Oceanpal 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 Oceanpal i.e., Oceanpal and Innodata go up and down completely randomly.

Pair Corralation between Oceanpal and Innodata

Allowing for the 90-day total investment horizon Oceanpal is expected to under-perform the Innodata. But the stock apears to be less risky and, when comparing its historical volatility, Oceanpal is 2.47 times less risky than Innodata. The stock trades about -0.13 of its potential returns per unit of risk. The Innodata is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,209  in Innodata on December 30, 2024 and sell it today you would lose (470.00) from holding Innodata or give up 11.17% of portfolio value over 90 days.

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

Oceanpal  vs.  Innodata

Oceanpal

Risk-Adjusted Performance

Very Weak

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

Innodata

Risk-Adjusted Performance

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 rather sound basic indicators, Innodata is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oceanpal and Innodata

The main advantage of trading using opposite Oceanpal and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanpal 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 Oceanpal 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.