Correlation Between ExlService Holdings and Amdocs

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

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

Diversification Opportunities for ExlService Holdings and Amdocs

0.77

Correlation Coefficient

ExlService Holdings  Amdocs

Poor diversification

The 3 months correlation between ExlService and Amdocs is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Amdocs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amdocs 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 Amdocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amdocs has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Amdocs go up and down completely randomly.

Pair Corralation between ExlService Holdings and Amdocs

Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Amdocs. In addition to that, ExlService Holdings is 1.32 times more volatile than Amdocs. It trades about -0.04 of its total potential returns per unit of risk. Amdocs is currently generating about -0.04 per unit of volatility. If you would invest  9,182  in Amdocs on May 25, 2025 and sell it today you would lose (355.00) from holding Amdocs or give up 3.87% 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.  Amdocs

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 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.

Amdocs

Risk-Adjusted Performance

Weakest

Over the last 90 days Amdocs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Amdocs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ExlService Holdings and Amdocs

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

The idea behind ExlService Holdings and Amdocs 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.