Correlation Between Automatic Data and ExlService Holdings
Can any of the company-specific risk be diversified away by investing in both Automatic Data 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 Automatic Data and ExlService Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and ExlService Holdings, you can compare the effects of market volatilities on Automatic Data 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 Automatic Data with a short position of ExlService Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and ExlService Holdings.
Diversification Opportunities for Automatic Data and ExlService Holdings
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Automatic and ExlService is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Automatic Data 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 Automatic Data Processing 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 Automatic Data i.e., Automatic Data and ExlService Holdings go up and down completely randomly.
Pair Corralation between Automatic Data and ExlService Holdings
Considering the 90-day investment horizon Automatic Data is expected to generate 1.93 times less return on investment than ExlService Holdings. But when comparing it to its historical volatility, Automatic Data Processing is 1.51 times less risky than ExlService Holdings. It trades about 0.2 of its potential returns per unit of risk. ExlService Holdings is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,950 in ExlService Holdings on August 30, 2024 and sell it today you would earn a total of 1,752 from holding ExlService Holdings or generate 59.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. ExlService Holdings
Performance |
| Timeline |
| Automatic Data Processing |
| ExlService Holdings |
Automatic Data and ExlService Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and ExlService Holdings
The main advantage of trading using opposite Automatic Data and ExlService Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data 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.| Automatic Data vs. Robert Half International | Automatic Data vs. Barrett Business Services | Automatic Data vs. ManpowerGroup | Automatic Data vs. Kforce Inc |
| ExlService Holdings vs. Genpact Limited | ExlService Holdings vs. ASGN Inc | ExlService Holdings vs. TTEC Holdings | ExlService Holdings vs. WNS Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |