Correlation Between ExlService Holdings and Science Applications
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Science Applications 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 Science Applications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Science Applications International, you can compare the effects of market volatilities on ExlService Holdings and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Science Applications.
Diversification Opportunities for ExlService Holdings and Science Applications
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ExlService and Science is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Science Applications go up and down completely randomly.
Pair Corralation between ExlService Holdings and Science Applications
Given the investment horizon of 90 days ExlService Holdings is expected to generate 0.58 times more return on investment than Science Applications. However, ExlService Holdings is 1.72 times less risky than Science Applications. It trades about 0.36 of its potential returns per unit of risk. Science Applications International is currently generating about -0.16 per unit of risk. If you would invest 3,928 in ExlService Holdings on August 24, 2024 and sell it today you would earn a total of 695.00 from holding ExlService Holdings or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExlService Holdings vs. Science Applications Internati
Performance |
| Timeline |
| ExlService Holdings |
| Science Applications |
ExlService Holdings and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExlService Holdings and Science Applications
The main advantage of trading using opposite ExlService Holdings and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| ExlService Holdings vs. Fidelity National Information | ExlService Holdings vs. International Business Machines | ExlService Holdings vs. Kyndryl Holdings | ExlService Holdings vs. DXC Technology Co |
| Science Applications vs. CACI International | Science Applications vs. CDW Corp | Science Applications vs. Gartner | Science Applications vs. Jack Henry Associates |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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