Correlation Between Exponent and ExlService Holdings
Can any of the company-specific risk be diversified away by investing in both Exponent 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 Exponent and ExlService Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exponent and ExlService Holdings, you can compare the effects of market volatilities on Exponent 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 Exponent with a short position of ExlService Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and ExlService Holdings.
Diversification Opportunities for Exponent and ExlService Holdings
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Exponent and ExlService is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Exponent 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 Exponent 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 Exponent i.e., Exponent and ExlService Holdings go up and down completely randomly.
Pair Corralation between Exponent and ExlService Holdings
Given the investment horizon of 90 days Exponent is expected to generate 1.33 times more return on investment than ExlService Holdings. However, Exponent is 1.33 times more volatile than ExlService Holdings. It trades about 0.02 of its potential returns per unit of risk. ExlService Holdings is currently generating about 0.0 per unit of risk. If you would invest 8,914 in Exponent on February 14, 2024 and sell it today you would earn a total of 558.00 from holding Exponent or generate 6.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Exponent vs. ExlService Holdings
Performance |
Timeline |
Exponent |
ExlService Holdings |
Exponent and ExlService Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exponent and ExlService Holdings
The main advantage of trading using opposite Exponent and ExlService Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent 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.Exponent vs. CRA International | Exponent vs. Huron Consulting Group | Exponent vs. Forrester Research | Exponent vs. Resources Connection |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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