Correlation Between Information Services and Usio

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

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

Diversification Opportunities for Information Services and Usio

0.61

Correlation Coefficient

Information Services  Usio

Poor diversification

The 3 months correlation between Information and Usio is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Group and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio Inc and Information Services 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 Information Services Group are associated (or correlated) with Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of Information Services i.e., Information Services and Usio go up and down completely randomly.

Pair Corralation between Information Services and Usio

Considering the 90-day investment horizon Information Services Group is expected to generate 0.85 times more return on investment than Usio. However, Information Services Group is 1.18 times less risky than Usio. It trades about 0.13 of its potential returns per unit of risk. Usio Inc is currently generating about 0.01 per unit of risk. If you would invest  319.00  in Information Services Group on September 1, 2024 and sell it today you would earn a total of  50.00  from holding Information Services Group or generate 15.67% return on investment over 90 days.

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

Information Services Group  vs.  Usio Inc

Information Services

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Information Services Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Information Services demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Information Services and Usio

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

The idea behind Information Services Group and Usio Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..