Correlation Between ExlService Holdings and YXTCOM GROUP

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

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

Diversification Opportunities for ExlService Holdings and YXTCOM GROUP

-0.51

Correlation Coefficient

ExlService Holdings  YXTCOM GROUP

Excellent diversification

The 3 months correlation between ExlService and YXTCOM is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and YXTCOM GROUP HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YXTCOM GROUP HOLDING 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 YXTCOM GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YXTCOM GROUP HOLDING has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and YXTCOM GROUP go up and down completely randomly.

Pair Corralation between ExlService Holdings and YXTCOM GROUP

Given the investment horizon of 90 days ExlService Holdings is expected to generate 0.14 times more return on investment than YXTCOM GROUP. However, ExlService Holdings is 7.12 times less risky than YXTCOM GROUP. It trades about -0.15 of its potential returns per unit of risk. YXTCOM GROUP HOLDING is currently generating about -0.06 per unit of risk. If you would invest  4,677  in ExlService Holdings on September 25, 2024 and sell it today you would lose (149.00) from holding ExlService Holdings or give up 3.19% 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.  YXTCOM GROUP HOLDING

ExlService Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ExlService Holdings are ranked lower than 16 (%) 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.

YXTCOM GROUP HOLDING

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind ExlService Holdings and YXTCOM GROUP HOLDING 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.