Correlation Between ExlService Holdings and CommScope Holding

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

By analyzing existing cross correlation between ExlService Holdings and CommScope Holding Co, you can compare the effects of market volatilities on ExlService Holdings and CommScope Holding 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 CommScope Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and CommScope Holding.

Diversification Opportunities for ExlService Holdings and CommScope Holding

-0.65

Correlation Coefficient

ExlService Holdings  CommScope Holding

Excellent diversification

The 3 months correlation between ExlService and CommScope is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and CommScope Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CommScope Holding 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 CommScope Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CommScope Holding has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and CommScope Holding go up and down completely randomly.

Pair Corralation between ExlService Holdings and CommScope Holding

Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the CommScope Holding. But the stock apears to be less risky and, when comparing its historical volatility, ExlService Holdings is 6.8 times less risky than CommScope Holding. The stock trades about -0.08 of its potential returns per unit of risk. The CommScope Holding Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  550.00  in CommScope Holding Co on May 10, 2025 and sell it today you would earn a total of  949.00  from holding CommScope Holding Co or generate 172.55% return on investment over 90 days.

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

ExlService Holdings  vs.  CommScope Holding Co

ExlService Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days ExlService Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CommScope Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CommScope Holding Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent primary indicators, CommScope Holding displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ExlService Holdings and CommScope Holding

The main advantage of trading using opposite ExlService Holdings and CommScope Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, CommScope Holding 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 CommScope Holding will offset losses from the drop in CommScope Holding's long position.

The idea behind ExlService Holdings and CommScope Holding Co 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.