Correlation Between ExlService Holdings and Shift4 Payments

Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and Shift4 Payments 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 Shift4 Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ExlService Holdings and Shift4 Payments, you can compare the effects of market volatilities on ExlService Holdings and Shift4 Payments 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 Shift4 Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Shift4 Payments.

Diversification Opportunities for ExlService Holdings and Shift4 Payments

-0.57

Correlation Coefficient

ExlService Holdings  Shift4 Payments

Excellent diversification

The 3 months correlation between ExlService and Shift4 is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Shift4 Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shift4 Payments 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 Shift4 Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shift4 Payments has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Shift4 Payments go up and down completely randomly.

Pair Corralation between ExlService Holdings and Shift4 Payments

Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Shift4 Payments. But the stock apears to be less risky and, when comparing its historical volatility, ExlService Holdings is 1.58 times less risky than Shift4 Payments. The stock trades about -0.05 of its potential returns per unit of risk. The Shift4 Payments is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  8,553  in Shift4 Payments on May 9, 2025 and sell it today you would lose (221.00) from holding Shift4 Payments or give up 2.58% of portfolio value over 90 days.

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

ExlService Holdings  vs.  Shift4 Payments

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Shift4 Payments

Risk-Adjusted Performance

Weakest

Over the last 90 days Shift4 Payments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Shift4 Payments is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ExlService Holdings and Shift4 Payments

The main advantage of trading using opposite ExlService Holdings and Shift4 Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings position performs unexpectedly, Shift4 Payments 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 Shift4 Payments will offset losses from the drop in Shift4 Payments' long position.

The idea behind ExlService Holdings and Shift4 Payments 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.