Correlation Between ExlService Holdings and CorVel Corp

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

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

Diversification Opportunities for ExlService Holdings and CorVel Corp

0.71

Correlation Coefficient

ExlService Holdings  CorVel Corp

Poor diversification

The 3 months correlation between ExlService and CorVel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and CorVel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CorVel Corp 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 CorVel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CorVel Corp has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and CorVel Corp go up and down completely randomly.

Pair Corralation between ExlService Holdings and CorVel Corp

Given the investment horizon of 90 days ExlService Holdings is expected to generate 1.28 times more return on investment than CorVel Corp. However, ExlService Holdings is 1.28 times more volatile than CorVel Corp. It trades about -0.03 of its potential returns per unit of risk. CorVel Corp is currently generating about -0.2 per unit of risk. 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	Significant
Accuracy	100.0%
Values	Daily Returns

ExlService Holdings  vs.  CorVel Corp

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.

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.

Pair Trading with ExlService Holdings and CorVel Corp

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

The idea behind ExlService Holdings and CorVel Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.