Correlation Between Global Business and WNS Holdings

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Can any of the company-specific risk be diversified away by investing in both Global Business and WNS 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 Global Business and WNS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Business Travel and WNS Holdings, you can compare the effects of market volatilities on Global Business and WNS 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 Global Business with a short position of WNS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Business and WNS Holdings.

Diversification Opportunities for Global Business and WNS Holdings

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Global and WNS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Global Business Travel and WNS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WNS Holdings and Global Business 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 Global Business Travel are associated (or correlated) with WNS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WNS Holdings has no effect on the direction of Global Business i.e., Global Business and WNS Holdings go up and down completely randomly.

Pair Corralation between Global Business and WNS Holdings

Given the investment horizon of 90 days Global Business Travel is expected to generate 0.61 times more return on investment than WNS Holdings. However, Global Business Travel is 1.64 times less risky than WNS Holdings. It trades about 0.0 of its potential returns per unit of risk. WNS Holdings is currently generating about -0.3 per unit of risk. If you would invest  944.00  in Global Business Travel on September 23, 2024 and sell it today you would lose (1.00) from holding Global Business Travel or give up 0.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Global Business Travel  vs.  WNS Holdings

 Performance 
       Timeline  
Global Business Travel 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Global Business Travel are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Global Business reported solid returns over the last few months and may actually be approaching a breakup point.
WNS Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WNS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Global Business and WNS Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global Business and WNS Holdings

The main advantage of trading using opposite Global Business and WNS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Business position performs unexpectedly, WNS 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 WNS Holdings will offset losses from the drop in WNS Holdings' long position.
The idea behind Global Business Travel and WNS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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