Correlation Between ExlService Holdings and Visa
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Visa 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 ExlService Holdings and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Visa Class A, you can compare the effects of market volatilities on ExlService Holdings and Visa 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 ExlService Holdings with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Visa.
Diversification Opportunities for ExlService Holdings and Visa
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between ExlService and Visa is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and ExlService 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 ExlService Holdings are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Visa go up and down completely randomly.
Pair Corralation between ExlService Holdings and Visa
Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Visa. In addition to that, ExlService Holdings is 2.77 times more volatile than Visa Class A. It trades about -0.11 of its total potential returns per unit of risk. Visa Class A is currently generating about -0.24 per unit of volatility. If you would invest 28,121 in Visa Class A on January 23, 2024 and sell it today you would lose (888.00) from holding Visa Class A or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExlService Holdings vs. Visa Class A
Performance |
| Timeline |
| ExlService Holdings |
| Visa Class A |
ExlService Holdings and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExlService Holdings and Visa
The main advantage of trading using opposite ExlService Holdings and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| ExlService Holdings vs. Formula Systems 1985 | ExlService Holdings vs. CSP Inc | ExlService Holdings vs. Nayax | ExlService Holdings vs. The Hackett Group |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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