Correlation Between ExlService Holdings and Formula Systems
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Formula Systems 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 Formula Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Formula Systems 1985, you can compare the effects of market volatilities on ExlService Holdings and Formula Systems 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 Formula Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Formula Systems.
Diversification Opportunities for ExlService Holdings and Formula Systems
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ExlService and Formula is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Formula Systems 1985 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula Systems 1985 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 Formula Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula Systems 1985 has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Formula Systems go up and down completely randomly.
Pair Corralation between ExlService Holdings and Formula Systems
Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Formula Systems. But the stock apears to be less risky and, when comparing its historical volatility, ExlService Holdings is 1.66 times less risky than Formula Systems. The stock trades about -0.02 of its potential returns per unit of risk. The Formula Systems 1985 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 8,996 in Formula Systems 1985 on April 25, 2025 and sell it today you would earn a total of 3,905 from holding Formula Systems 1985 or generate 43.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ExlService Holdings vs. Formula Systems 1985
Performance |
Timeline |
ExlService Holdings |
Formula Systems 1985 |
ExlService Holdings and Formula Systems Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ExlService Holdings and Formula Systems
The main advantage of trading using opposite ExlService Holdings and Formula Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Formula Systems 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 Formula Systems will offset losses from the drop in Formula Systems' long position.ExlService Holdings vs. WNS Holdings | ExlService Holdings vs. Genpact Limited | ExlService Holdings vs. ASGN Inc | ExlService Holdings vs. CACI International |
Formula Systems vs. The Hackett Group | Formula Systems vs. CSP Inc | Formula Systems vs. Nayax | Formula Systems vs. Magic Software Enterprises |
Check out your portfolio center.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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