Correlation Between ExlService Holdings and Digimarc
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Digimarc 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 ExlService Holdings and Digimarc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Digimarc, you can compare the effects of market volatilities on ExlService Holdings and Digimarc 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 ExlService Holdings with a short position of Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Digimarc.
Diversification Opportunities for ExlService Holdings and Digimarc
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ExlService and Digimarc is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc and ExlService 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 ExlService Holdings are associated (or correlated) with Digimarc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digimarc has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Digimarc go up and down completely randomly.
Pair Corralation between ExlService Holdings and Digimarc
Given the investment horizon of 90 days ExlService Holdings is expected to generate 0.98 times more return on investment than Digimarc. However, ExlService Holdings is 1.02 times less risky than Digimarc. It trades about -0.18 of its potential returns per unit of risk. Digimarc is currently generating about -0.53 per unit of risk. If you would invest 3,154 in ExlService Holdings on January 20, 2024 and sell it today you would lose (222.00) from holding ExlService Holdings or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExlService Holdings vs. Digimarc
Performance |
| Timeline |
| ExlService Holdings |
| Digimarc |
ExlService Holdings and Digimarc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExlService Holdings and Digimarc
The main advantage of trading using opposite ExlService Holdings and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Digimarc 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 Digimarc will offset losses from the drop in Digimarc's long position.| ExlService Holdings vs. ASGN Inc | ExlService Holdings vs. CACI International | ExlService Holdings vs. Perficient | ExlService Holdings vs. Science Applications International |
| Digimarc vs. CLPS Inc | Digimarc vs. Formula Systems 1985 | Digimarc vs. CSP Inc | Digimarc vs. Information Services Group |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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