Correlation Between Clarivate Plc and ExlService Holdings

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

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

Diversification Opportunities for Clarivate Plc and ExlService Holdings

0.26

Correlation Coefficient

Clarivate Plc  ExlService Holdings

Modest diversification

The 3 months correlation between Clarivate and ExlService is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Clarivate Plc and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Clarivate Plc 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 Clarivate Plc 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 Clarivate Plc i.e., Clarivate Plc and ExlService Holdings go up and down completely randomly.

Pair Corralation between Clarivate Plc and ExlService Holdings

Assuming the 90 days trading horizon Clarivate Plc is expected to generate 1.38 times more return on investment than ExlService Holdings. However, Clarivate Plc is 1.38 times more volatile than ExlService Holdings. It trades about -0.1 of its potential returns per unit of risk. ExlService Holdings is currently generating about -0.16 per unit of risk. If you would invest  2,987  in Clarivate Plc on February 2, 2024 and sell it today you would lose (157.00) from holding Clarivate Plc or give up 5.26% of portfolio value over 90 days.

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

Clarivate Plc  vs.  ExlService Holdings

Clarivate Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clarivate Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Preferred Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

ExlService Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ExlService Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, ExlService Holdings is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Clarivate Plc and ExlService Holdings

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

The idea behind Clarivate Plc and ExlService 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.