Correlation Between WNS Holdings and Parsons Corp

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

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

Diversification Opportunities for WNS Holdings and Parsons Corp

0.87

Correlation Coefficient

WNS Holdings  Parsons Corp

Very poor diversification

The 3 months correlation between WNS and Parsons is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and Parsons Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parsons Corp and WNS 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 WNS Holdings are associated (or correlated) with Parsons Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parsons Corp has no effect on the direction of WNS Holdings i.e., WNS Holdings and Parsons Corp go up and down completely randomly.

Pair Corralation between WNS Holdings and Parsons Corp

Considering the 90-day investment horizon WNS Holdings is expected to generate 1.48 times more return on investment than Parsons Corp. However, WNS Holdings is 1.48 times more volatile than Parsons Corp. It trades about 0.17 of its potential returns per unit of risk. Parsons Corp is currently generating about 0.17 per unit of risk. If you would invest  5,905  in WNS Holdings on May 7, 2025 and sell it today you would earn a total of  1,575  from holding WNS Holdings or generate 26.67% return on investment over 90 days.

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

WNS Holdings  vs.  Parsons Corp

WNS Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WNS Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, WNS Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Parsons Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Parsons Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Parsons Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WNS Holdings and Parsons Corp

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

The idea behind WNS Holdings and Parsons Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.