Correlation Between ExlService Holdings and Health Catalyst

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

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

Diversification Opportunities for ExlService Holdings and Health Catalyst

0.39

Correlation Coefficient

ExlService Holdings  Health Catalyst

Weak diversification

The 3 months correlation between ExlService and Health is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Health Catalyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Catalyst 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 Health Catalyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Catalyst has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Health Catalyst go up and down completely randomly.

Pair Corralation between ExlService Holdings and Health Catalyst

Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Health Catalyst. But the stock apears to be less risky and, when comparing its historical volatility, ExlService Holdings is 1.55 times less risky than Health Catalyst. The stock trades about -0.02 of its potential returns per unit of risk. The Health Catalyst is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  410.00  in Health Catalyst on April 25, 2025 and sell it today you would lose (5.00) from holding Health Catalyst or give up 1.22% of portfolio value over 90 days.

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

ExlService Holdings  vs.  Health Catalyst

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.

Health Catalyst

Risk-Adjusted Performance

Weak

Over the last 90 days Health Catalyst has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Health Catalyst is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ExlService Holdings and Health Catalyst

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

The idea behind ExlService Holdings and Health Catalyst 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.