Correlation Between Thoughtworks Holding and WNS Holdings
Can any of the company-specific risk be diversified away by investing in both Thoughtworks Holding 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 Thoughtworks Holding and WNS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thoughtworks Holding and WNS Holdings, you can compare the effects of market volatilities on Thoughtworks Holding 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 Thoughtworks Holding with a short position of WNS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thoughtworks Holding and WNS Holdings.
Diversification Opportunities for Thoughtworks Holding and WNS Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thoughtworks and WNS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Thoughtworks Holding and WNS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WNS Holdings and Thoughtworks Holding 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 Thoughtworks Holding 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 Thoughtworks Holding i.e., Thoughtworks Holding and WNS Holdings go up and down completely randomly.
Pair Corralation between Thoughtworks Holding and WNS Holdings
Given the investment horizon of 90 days Thoughtworks Holding is expected to generate 12.74 times less return on investment than WNS Holdings. But when comparing it to its historical volatility, Thoughtworks Holding is 4.0 times less risky than WNS Holdings. It trades about 0.06 of its potential returns per unit of risk. WNS Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,841 in WNS Holdings on August 28, 2024 and sell it today you would earn a total of 459.00 from holding WNS Holdings or generate 9.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
Thoughtworks Holding vs. WNS Holdings
Performance |
| Timeline |
| Thoughtworks Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| WNS Holdings |
Thoughtworks Holding and WNS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thoughtworks Holding and WNS Holdings
The main advantage of trading using opposite Thoughtworks Holding and WNS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thoughtworks Holding 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.| Thoughtworks Holding vs. ExlService Holdings | Thoughtworks Holding vs. Genpact Limited | Thoughtworks Holding vs. ASGN Inc | Thoughtworks Holding vs. TTEC Holdings |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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