Correlation Between ExlService Holdings and WNS Holdings

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

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

Diversification Opportunities for ExlService Holdings and WNS Holdings

-0.47

Correlation Coefficient

ExlService Holdings  WNS Holdings

Very good diversification

The 3 months correlation between ExlService and WNS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and WNS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WNS Holdings 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 WNS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WNS Holdings has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and WNS Holdings go up and down completely randomly.

Pair Corralation between ExlService Holdings and WNS Holdings

Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the WNS Holdings. But the stock apears to be less risky and, when comparing its historical volatility, ExlService Holdings is 1.41 times less risky than WNS Holdings. The stock trades about -0.07 of its potential returns per unit of risk. The WNS Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  6,160  in WNS Holdings on January 26, 2025 and sell it today you would lose (152.00) from holding WNS Holdings or give up 2.47% 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.  WNS Holdings

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 latest fragile performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

WNS Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ExlService Holdings and WNS Holdings

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

The idea behind ExlService Holdings and WNS Holdings 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.