Correlation Between ExlService Holdings and YY Group

Can any of the company-specific risk be diversified away by investing in both ExlService Holdings and YY 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 YY 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 YY Group Holding, you can compare the effects of market volatilities on ExlService Holdings and YY 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 YY Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and YY Group.

Diversification Opportunities for ExlService Holdings and YY Group

0.88

Correlation Coefficient

ExlService Holdings  YY Group

Very poor diversification

The 3 months correlation between ExlService and YYGH is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and YY Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY 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 YY Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Group Holding has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and YY Group go up and down completely randomly.

Pair Corralation between ExlService Holdings and YY Group

Given the investment horizon of 90 days ExlService Holdings is expected to generate 0.33 times more return on investment than YY Group. However, ExlService Holdings is 3.06 times less risky than YY Group. It trades about 0.26 of its potential returns per unit of risk. YY Group Holding is currently generating about -0.13 per unit of risk. If you would invest  4,461  in ExlService Holdings on October 22, 2024 and sell it today you would earn a total of  254.00  from holding ExlService Holdings or generate 5.69% return on investment over 90 days.

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

ExlService Holdings  vs.  YY Group Holding

ExlService Holdings

Risk-Adjusted Performance

15 of 100

Good

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 fragile essential indicators, ExlService Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

YY Group Holding

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in YY Group Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical and fundamental indicators, YY Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ExlService Holdings and YY Group

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

The idea behind ExlService Holdings and YY 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.