Correlation Between ExlService Holdings and EVgo Equity

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

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

Diversification Opportunities for ExlService Holdings and EVgo Equity

0.49

Correlation Coefficient

ExlService Holdings  EVgo Equity

Very weak diversification

The 3 months correlation between ExlService and EVgo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and EVgo Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVgo Equity Warrants 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 EVgo Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVgo Equity Warrants has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and EVgo Equity go up and down completely randomly.

Pair Corralation between ExlService Holdings and EVgo Equity

Given the investment horizon of 90 days ExlService Holdings is expected to generate 0.22 times more return on investment than EVgo Equity. However, ExlService Holdings is 4.59 times less risky than EVgo Equity. It trades about 0.14 of its potential returns per unit of risk. EVgo Equity Warrants is currently generating about -0.14 per unit of risk. If you would invest  4,553  in ExlService Holdings on March 9, 2025 and sell it today you would earn a total of  151.00  from holding ExlService Holdings or generate 3.32% return on investment over 90 days.

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

ExlService Holdings  vs.  EVgo Equity Warrants

ExlService Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ExlService Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, ExlService Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

EVgo Equity Warrants

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EVgo Equity Warrants are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, EVgo Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ExlService Holdings and EVgo Equity

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

The idea behind ExlService Holdings and EVgo Equity Warrants 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.