Correlation Between Xalles Holdings and Innodata

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

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

Diversification Opportunities for Xalles Holdings and Innodata

-0.86

Correlation Coefficient

Xalles Holdings  Innodata

Pay attention - limited upside

The 3 months correlation between Xalles and Innodata is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xalles Holdings and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and Xalles 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 Xalles Holdings 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 Xalles Holdings i.e., Xalles Holdings and Innodata go up and down completely randomly.

Pair Corralation between Xalles Holdings and Innodata

Given the investment horizon of 90 days Xalles Holdings is expected to under-perform the Innodata. But the pink sheet apears to be less risky and, when comparing its historical volatility, Xalles Holdings is 1.03 times less risky than Innodata. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Innodata is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,548  in Innodata on September 12, 2024 and sell it today you would earn a total of  2,280  from holding Innodata or generate 147.29% return on investment over 90 days.

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

Xalles Holdings  vs.  Innodata

Xalles Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xalles Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Innodata

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innodata are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Innodata exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Xalles Holdings and Innodata

The main advantage of trading using opposite Xalles Holdings and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xalles Holdings 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 Xalles Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.