Correlation Between ExlService Holdings and ProtoSource

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

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

Diversification Opportunities for ExlService Holdings and ProtoSource

0.0

Correlation Coefficient

ExlService Holdings  ProtoSource

Pay attention - limited upside

The 3 months correlation between ExlService and ProtoSource is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and ProtoSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProtoSource 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 ProtoSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProtoSource has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and ProtoSource go up and down completely randomly.

Pair Corralation between ExlService Holdings and ProtoSource

If you would invest  4,625  in ExlService Holdings on December 4, 2024 and sell it today you would earn a total of  70.00  from holding ExlService Holdings or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ExlService Holdings  vs.  ProtoSource

ExlService Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ExlService Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, ExlService Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ProtoSource

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProtoSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, ProtoSource is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ExlService Holdings and ProtoSource

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

The idea behind ExlService Holdings and ProtoSource 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.