Correlation Between Science Applications and ExlService Holdings
Can any of the company-specific risk be diversified away by investing in both Science Applications and ExlService 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 Science Applications and ExlService Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Applications International and ExlService Holdings, you can compare the effects of market volatilities on Science Applications and ExlService 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 Science Applications with a short position of ExlService Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and ExlService Holdings.
Diversification Opportunities for Science Applications and ExlService Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Science and ExlService is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Science Applications 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 Science Applications International are associated (or correlated) with ExlService Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExlService Holdings has no effect on the direction of Science Applications i.e., Science Applications and ExlService Holdings go up and down completely randomly.
Pair Corralation between Science Applications and ExlService Holdings
Given the investment horizon of 90 days Science Applications International is expected to generate 0.77 times more return on investment than ExlService Holdings. However, Science Applications International is 1.29 times less risky than ExlService Holdings. It trades about 0.49 of its potential returns per unit of risk. ExlService Holdings is currently generating about 0.17 per unit of risk. If you would invest 12,404 in Science Applications International on February 16, 2024 and sell it today you would earn a total of 1,264 from holding Science Applications International or generate 10.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Science Applications Internati vs. ExlService Holdings
Performance |
Timeline |
Science Applications |
ExlService Holdings |
Science Applications and ExlService Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Science Applications and ExlService Holdings
The main advantage of trading using opposite Science Applications and ExlService Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Applications position performs unexpectedly, ExlService 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 ExlService Holdings will offset losses from the drop in ExlService Holdings' long position.Science Applications vs. EPAM Systems | Science Applications vs. Infosys Ltd ADR | Science Applications vs. Cognizant Technology Solutions | Science Applications vs. FiscalNote Holdings |
ExlService Holdings vs. Concentrix | ExlService Holdings vs. International Business Machines | ExlService Holdings vs. ASGN Inc | ExlService Holdings vs. CACI International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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