Correlation Between Digimarc and ExlService Holdings
Can any of the company-specific risk be diversified away by investing in both Digimarc and ExlService Holdings 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 Digimarc and ExlService Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and ExlService Holdings, you can compare the effects of market volatilities on Digimarc and ExlService Holdings 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 Digimarc with a short position of ExlService Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and ExlService Holdings.
Diversification Opportunities for Digimarc and ExlService Holdings
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digimarc and ExlService is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Digimarc 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 Digimarc are associated (or correlated) with ExlService Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExlService Holdings has no effect on the direction of Digimarc i.e., Digimarc and ExlService Holdings go up and down completely randomly.
Pair Corralation between Digimarc and ExlService Holdings
Given the investment horizon of 90 days Digimarc is expected to under-perform the ExlService Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Digimarc is 1.1 times less risky than ExlService Holdings. The stock trades about -0.58 of its potential returns per unit of risk. The ExlService Holdings is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 3,083 in ExlService Holdings on January 26, 2024 and sell it today you would lose (126.00) from holding ExlService Holdings or give up 4.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digimarc vs. ExlService Holdings
Performance |
| Timeline |
| Digimarc |
| ExlService Holdings |
Digimarc and ExlService Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digimarc and ExlService Holdings
The main advantage of trading using opposite Digimarc and ExlService Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc position performs unexpectedly, ExlService Holdings 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 ExlService Holdings will offset losses from the drop in ExlService Holdings' long position.| Digimarc vs. Infosys Ltd ADR | Digimarc vs. Cognizant Technology Solutions | Digimarc vs. Fidelity National Information | Digimarc vs. Jack Henry Associates |
| ExlService Holdings vs. CACI International | ExlService Holdings vs. CDW Corp | ExlService Holdings vs. Jack Henry Associates | ExlService Holdings vs. Broadridge Financial Solutions |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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