Correlation Between WNS Holdings and EPAM Systems
Can any of the company-specific risk be diversified away by investing in both WNS Holdings and EPAM Systems 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 EPAM Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WNS Holdings and EPAM Systems, you can compare the effects of market volatilities on WNS Holdings and EPAM Systems 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 EPAM Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of WNS Holdings and EPAM Systems.
Diversification Opportunities for WNS Holdings and EPAM Systems
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between WNS and EPAM is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems 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 EPAM Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPAM Systems has no effect on the direction of WNS Holdings i.e., WNS Holdings and EPAM Systems go up and down completely randomly.
Pair Corralation between WNS Holdings and EPAM Systems
Considering the 90-day investment horizon WNS Holdings is expected to generate 3.4 times more return on investment than EPAM Systems. However, WNS Holdings is 3.4 times more volatile than EPAM Systems. It trades about 0.29 of its potential returns per unit of risk. EPAM Systems is currently generating about 0.25 per unit of risk. If you would invest 4,739 in WNS Holdings on November 1, 2024 and sell it today you would earn a total of 1,503 from holding WNS Holdings or generate 31.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WNS Holdings vs. EPAM Systems
Performance |
| Timeline |
| WNS Holdings |
| EPAM Systems |
WNS Holdings and EPAM Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WNS Holdings and EPAM Systems
The main advantage of trading using opposite WNS Holdings and EPAM Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WNS Holdings position performs unexpectedly, EPAM Systems 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 EPAM Systems will offset losses from the drop in EPAM Systems' long position.| WNS Holdings vs. Genpact Limited | WNS Holdings vs. ASGN Inc | WNS Holdings vs. CACI International | WNS Holdings vs. ExlService Holdings |
| EPAM Systems vs. Concentrix | EPAM Systems vs. Gartner | EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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