Correlation Between ExlService Holdings and Resources Connection
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Resources Connection 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 Resources Connection into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Resources Connection, you can compare the effects of market volatilities on ExlService Holdings and Resources Connection 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 Resources Connection. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Resources Connection.
Diversification Opportunities for ExlService Holdings and Resources Connection
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ExlService and Resources is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Resources Connection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resources Connection 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 Resources Connection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resources Connection has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Resources Connection go up and down completely randomly.
Pair Corralation between ExlService Holdings and Resources Connection
Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Resources Connection. In addition to that, ExlService Holdings is 1.03 times more volatile than Resources Connection. It trades about -0.05 of its total potential returns per unit of risk. Resources Connection is currently generating about 0.0 per unit of volatility. If you would invest 878.00 in Resources Connection on September 13, 2024 and sell it today you would lose (1.50) from holding Resources Connection or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExlService Holdings vs. Resources Connection
Performance |
| Timeline |
| ExlService Holdings |
| Resources Connection |
ExlService Holdings and Resources Connection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExlService Holdings and Resources Connection
The main advantage of trading using opposite ExlService Holdings and Resources Connection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Resources Connection 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 Resources Connection will offset losses from the drop in Resources Connection's long position.| ExlService Holdings vs. Oneconnect Financial Technology | ExlService Holdings vs. Global Business Travel | ExlService Holdings vs. Alight Inc | ExlService Holdings vs. CS Disco LLC |
| Resources Connection vs. CRA International | Resources Connection vs. Huron Consulting Group | Resources Connection vs. Forrester Research | Resources Connection vs. Exponent |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |