Correlation Between ExlService Holdings and Insight Enterprises

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

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

Diversification Opportunities for ExlService Holdings and Insight Enterprises

0.04

Correlation Coefficient

ExlService Holdings  Insight Enterprises

Significant diversification

The 3 months correlation between ExlService and Insight is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Insight Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insight Enterprises 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 Insight Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insight Enterprises has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Insight Enterprises go up and down completely randomly.

Pair Corralation between ExlService Holdings and Insight Enterprises

Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Insight Enterprises. But the stock apears to be less risky and, when comparing its historical volatility, ExlService Holdings is 1.7 times less risky than Insight Enterprises. The stock trades about -0.05 of its potential returns per unit of risk. The Insight Enterprises is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  13,344  in Insight Enterprises on May 21, 2025 and sell it today you would lose (152.00) from holding Insight Enterprises or give up 1.14% of portfolio value over 90 days.

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

ExlService Holdings  vs.  Insight Enterprises

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.

Insight Enterprises

Risk-Adjusted Performance

Weakest

Over the last 90 days Insight Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Insight Enterprises 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 Insight Enterprises

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

The idea behind ExlService Holdings and Insight Enterprises 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.