Correlation Between Alight and ExlService Holdings
Can any of the company-specific risk be diversified away by investing in both Alight 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 Alight and ExlService Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alight Inc and ExlService Holdings, you can compare the effects of market volatilities on Alight 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 Alight with a short position of ExlService Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alight and ExlService Holdings.
Diversification Opportunities for Alight and ExlService Holdings
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alight and ExlService is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alight Inc and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Alight 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 Alight Inc 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 Alight i.e., Alight and ExlService Holdings go up and down completely randomly.
Pair Corralation between Alight and ExlService Holdings
Given the investment horizon of 90 days Alight is expected to generate 61.05 times less return on investment than ExlService Holdings. In addition to that, Alight is 1.4 times more volatile than ExlService Holdings. It trades about 0.0 of its total potential returns per unit of risk. ExlService Holdings is currently generating about 0.08 per unit of volatility. If you would invest 3,020 in ExlService Holdings on August 27, 2024 and sell it today you would earn a total of 1,601 from holding ExlService Holdings or generate 53.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alight Inc vs. ExlService Holdings
Performance |
| Timeline |
| Alight Inc |
| ExlService Holdings |
Alight and ExlService Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alight and ExlService Holdings
The main advantage of trading using opposite Alight and ExlService Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alight 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.The idea behind Alight Inc and ExlService Holdings 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.| ExlService Holdings vs. Oneconnect Financial Technology | ExlService Holdings vs. Global Business Travel | ExlService Holdings vs. Alight Inc | ExlService Holdings vs. CS Disco LLC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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