Correlation Between ExlService Holdings and Aeries Technology
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Aeries Technology 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 Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Aeries Technology, you can compare the effects of market volatilities on ExlService Holdings and Aeries Technology 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 Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Aeries Technology.
Diversification Opportunities for ExlService Holdings and Aeries Technology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ExlService and Aeries is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology 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 Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Aeries Technology go up and down completely randomly.
Pair Corralation between ExlService Holdings and Aeries Technology
Given the investment horizon of 90 days ExlService Holdings is expected to generate 10.43 times less return on investment than Aeries Technology. But when comparing it to its historical volatility, ExlService Holdings is 12.83 times less risky than Aeries Technology. It trades about 0.04 of its potential returns per unit of risk. Aeries Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Aeries Technology on August 29, 2024 and sell it today you would lose (9.49) from holding Aeries Technology or give up 73.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 21.17% |
| Values | Daily Returns |
ExlService Holdings vs. Aeries Technology
Performance |
| Timeline |
| ExlService Holdings |
| Aeries Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ExlService Holdings and Aeries Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExlService Holdings and Aeries Technology
The main advantage of trading using opposite ExlService Holdings and Aeries Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Aeries Technology 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 Aeries Technology will offset losses from the drop in Aeries Technology's long position.| ExlService Holdings vs. Genpact Limited | ExlService Holdings vs. ASGN Inc | ExlService Holdings vs. TTEC Holdings | ExlService Holdings vs. WNS Holdings |
| Aeries Technology vs. Ecolab Inc | Aeries Technology vs. Air Products and | Aeries Technology vs. Ecovyst | Aeries Technology vs. Axalta Coating Systems |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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