Correlation Between Leidos Holdings and WNS Holdings

Can any of the company-specific risk be diversified away by investing in both Leidos Holdings 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 Leidos Holdings and WNS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Leidos Holdings and WNS Holdings, you can compare the effects of market volatilities on Leidos Holdings 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 Leidos Holdings with a short position of WNS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leidos Holdings and WNS Holdings.

Diversification Opportunities for Leidos Holdings and WNS Holdings

-0.72

Correlation Coefficient

Leidos Holdings  WNS Holdings

Pay attention - limited upside

The 3 months correlation between Leidos and WNS is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and WNS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WNS Holdings and Leidos 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 Leidos Holdings 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 Leidos Holdings i.e., Leidos Holdings and WNS Holdings go up and down completely randomly.

Pair Corralation between Leidos Holdings and WNS Holdings

Given the investment horizon of 90 days Leidos Holdings is expected to generate 0.41 times more return on investment than WNS Holdings. However, Leidos Holdings is 2.44 times less risky than WNS Holdings. It trades about 0.18 of its potential returns per unit of risk. WNS Holdings is currently generating about -0.05 per unit of risk. If you would invest  9,664  in Leidos Holdings on February 2, 2024 and sell it today you would earn a total of  4,602  from holding Leidos Holdings or generate 47.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Leidos Holdings  vs.  WNS Holdings

Leidos Holdings

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Leidos Holdings are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Leidos Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

WNS Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WNS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Leidos Holdings and WNS Holdings

The main advantage of trading using opposite Leidos Holdings and WNS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leidos Holdings 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.

The idea behind Leidos Holdings and WNS Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.