Correlation Between CorVel Corp and ExlService Holdings

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

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

Diversification Opportunities for CorVel Corp and ExlService Holdings

0.59

Correlation Coefficient

CorVel Corp  ExlService Holdings

Very weak diversification

The 3 months correlation between CorVel and ExlService is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CorVel Corp and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and CorVel Corp 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 CorVel Corp 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 CorVel Corp i.e., CorVel Corp and ExlService Holdings go up and down completely randomly.

Pair Corralation between CorVel Corp and ExlService Holdings

Given the investment horizon of 90 days CorVel Corp is expected to under-perform the ExlService Holdings. But the stock apears to be less risky and, when comparing its historical volatility, CorVel Corp is 1.28 times less risky than ExlService Holdings. The stock trades about -0.2 of its potential returns per unit of risk. The ExlService Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,443  in ExlService Holdings on April 25, 2025 and sell it today you would lose (203.00) from holding ExlService Holdings or give up 4.57% of portfolio value over 90 days.

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

CorVel Corp  vs.  ExlService Holdings

CorVel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CorVel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

ExlService Holdings

Risk-Adjusted Performance

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CorVel Corp and ExlService Holdings

The main advantage of trading using opposite CorVel Corp and ExlService Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CorVel Corp 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 CorVel Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.