Correlation Between Civeo Corp and ExlService Holdings

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

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

Diversification Opportunities for Civeo Corp and ExlService Holdings

-0.84

Correlation Coefficient

Civeo Corp  ExlService Holdings

Pay attention - limited upside

The 3 months correlation between Civeo and ExlService is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Civeo Corp and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Civeo Corp 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 Civeo Corp are associated (or correlated) with ExlService Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExlService Holdings has no effect on the direction of Civeo Corp i.e., Civeo Corp and ExlService Holdings go up and down completely randomly.

Pair Corralation between Civeo Corp and ExlService Holdings

Given the investment horizon of 90 days Civeo Corp is expected to under-perform the ExlService Holdings. In addition to that, Civeo Corp is 1.19 times more volatile than ExlService Holdings. It trades about -0.16 of its total potential returns per unit of risk. ExlService Holdings is currently generating about 0.19 per unit of volatility. If you would invest  3,805  in ExlService Holdings on September 26, 2024 and sell it today you would earn a total of  723.00  from holding ExlService Holdings or generate 19.0% return on investment over 90 days.

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

Civeo Corp  vs.  ExlService Holdings

Civeo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Civeo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ExlService Holdings

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ExlService Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, ExlService Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Civeo Corp and ExlService Holdings

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

The idea behind Civeo Corp and ExlService 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.