Correlation Between Oneconnect Financial and Innodata

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

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

Diversification Opportunities for Oneconnect Financial and Innodata

0.19

Correlation Coefficient

Oneconnect Financial  Innodata

Average diversification

The 3 months correlation between Oneconnect and Innodata is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Oneconnect Financial Technolog and Innodata in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innodata and Oneconnect Financial 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 Oneconnect Financial Technology 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 Oneconnect Financial i.e., Oneconnect Financial and Innodata go up and down completely randomly.

Pair Corralation between Oneconnect Financial and Innodata

Given the investment horizon of 90 days Oneconnect Financial is expected to generate 1.15 times less return on investment than Innodata. In addition to that, Oneconnect Financial is 1.14 times more volatile than Innodata. It trades about 0.13 of its total potential returns per unit of risk. Innodata is currently generating about 0.18 per unit of volatility. If you would invest  1,477  in Innodata on September 17, 2024 and sell it today you would earn a total of  2,296  from holding Innodata or generate 155.45% return on investment over 90 days.

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

Oneconnect Financial Technolog  vs.  Innodata

Oneconnect Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oneconnect Financial Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Oneconnect Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain basic indicators, Innodata exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oneconnect Financial and Innodata

The main advantage of trading using opposite Oneconnect Financial and Innodata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oneconnect Financial 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 Oneconnect Financial Technology 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.