Correlation Between ExlService Holdings and Kyndryl Holdings
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Kyndryl 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 ExlService Holdings and Kyndryl Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Kyndryl Holdings, you can compare the effects of market volatilities on ExlService Holdings and Kyndryl 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 ExlService Holdings with a short position of Kyndryl Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Kyndryl Holdings.
Diversification Opportunities for ExlService Holdings and Kyndryl Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ExlService and Kyndryl is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Kyndryl Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyndryl Holdings 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 Kyndryl Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyndryl Holdings has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Kyndryl Holdings go up and down completely randomly.
Pair Corralation between ExlService Holdings and Kyndryl Holdings
Given the investment horizon of 90 days ExlService Holdings is expected to generate 1.65 times less return on investment than Kyndryl Holdings. But when comparing it to its historical volatility, ExlService Holdings is 1.99 times less risky than Kyndryl Holdings. It trades about 0.27 of its potential returns per unit of risk. Kyndryl Holdings is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,369 in Kyndryl Holdings on August 30, 2024 and sell it today you would earn a total of 1,113 from holding Kyndryl Holdings or generate 46.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExlService Holdings vs. Kyndryl Holdings
Performance |
| Timeline |
| ExlService Holdings |
| Kyndryl Holdings |
ExlService Holdings and Kyndryl Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExlService Holdings and Kyndryl Holdings
The main advantage of trading using opposite ExlService Holdings and Kyndryl Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Kyndryl 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 Kyndryl Holdings will offset losses from the drop in Kyndryl Holdings' long position.| ExlService Holdings vs. Genpact Limited | ExlService Holdings vs. ASGN Inc | ExlService Holdings vs. TTEC Holdings | ExlService Holdings vs. WNS Holdings |
| Kyndryl Holdings vs. Innodata | Kyndryl Holdings vs. International Business Machines | Kyndryl Holdings vs. Aurora Innovation | Kyndryl Holdings vs. BigBearai 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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