Correlation Between Appen and WNS Holdings
Can any of the company-specific risk be diversified away by investing in both Appen and WNS 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 Appen and WNS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Appen Limited and WNS Holdings, you can compare the effects of market volatilities on Appen and WNS 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 Appen with a short position of WNS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Appen and WNS Holdings.
Diversification Opportunities for Appen and WNS Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Appen and WNS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Appen Limited and WNS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WNS Holdings and Appen 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 Appen Limited are associated (or correlated) with WNS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WNS Holdings has no effect on the direction of Appen i.e., Appen and WNS Holdings go up and down completely randomly.
Pair Corralation between Appen and WNS Holdings
Assuming the 90 days horizon Appen Limited is expected to generate 3.31 times more return on investment than WNS Holdings. However, Appen is 3.31 times more volatile than WNS Holdings. It trades about 0.09 of its potential returns per unit of risk. WNS Holdings is currently generating about 0.18 per unit of risk. If you would invest 64.00 in Appen Limited on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Appen Limited or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Appen Limited vs. WNS Holdings
Performance |
| Timeline |
| Appen Limited |
| WNS Holdings |
Appen and WNS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Appen and WNS Holdings
The main advantage of trading using opposite Appen and WNS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Appen position performs unexpectedly, WNS 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 WNS Holdings will offset losses from the drop in WNS Holdings' long position.The idea behind Appen Limited and WNS 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.| WNS Holdings vs. Genpact Limited | WNS Holdings vs. ASGN Inc | WNS Holdings vs. CACI International | WNS Holdings vs. ExlService 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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