Correlation Between WNS Holdings and CSP
Can any of the company-specific risk be diversified away by investing in both WNS Holdings and CSP 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 WNS Holdings and CSP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WNS Holdings and CSP Inc, you can compare the effects of market volatilities on WNS Holdings and CSP 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 WNS Holdings with a short position of CSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of WNS Holdings and CSP.
Diversification Opportunities for WNS Holdings and CSP
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between WNS and CSP is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and CSP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP Inc and WNS 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 WNS Holdings are associated (or correlated) with CSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Inc has no effect on the direction of WNS Holdings i.e., WNS Holdings and CSP go up and down completely randomly.
Pair Corralation between WNS Holdings and CSP
Considering the 90-day investment horizon WNS Holdings is expected to generate 12.36 times less return on investment than CSP. But when comparing it to its historical volatility, WNS Holdings is 1.42 times less risky than CSP. It trades about 0.03 of its potential returns per unit of risk. CSP Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,274 in CSP Inc on August 27, 2024 and sell it today you would earn a total of 575.00 from holding CSP Inc or generate 45.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WNS Holdings vs. CSP Inc
Performance |
| Timeline |
| WNS Holdings |
| CSP Inc |
WNS Holdings and CSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WNS Holdings and CSP
The main advantage of trading using opposite WNS Holdings and CSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WNS Holdings position performs unexpectedly, CSP 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 CSP will offset losses from the drop in CSP's long position.| WNS Holdings vs. Genpact Limited | WNS Holdings vs. ASGN Inc | WNS Holdings vs. CACI International | WNS Holdings vs. ExlService Holdings |
| CSP vs. The Hackett Group | CSP vs. Nayax | CSP vs. Formula Systems 1985 | CSP vs. Information Services Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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