Correlation Between WNS Holdings and CSP

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

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

Diversification Opportunities for WNS Holdings and CSP

0.37

Correlation Coefficient

WNS Holdings  CSP

Weak diversification

The 3 months correlation between WNS and CSP is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and CSP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP Inc and WNS 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 WNS Holdings are associated (or correlated) with CSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Inc has no effect on the direction of WNS Holdings i.e., WNS Holdings and CSP go up and down completely randomly.

Pair Corralation between WNS Holdings and CSP

Considering the 90-day investment horizon WNS Holdings is expected to generate 0.84 times more return on investment than CSP. However, WNS Holdings is 1.2 times less risky than CSP. It trades about 0.17 of its potential returns per unit of risk. CSP Inc is currently generating about 0.0 per unit of risk. If you would invest  4,728  in WNS Holdings on December 26, 2024 and sell it today you would earn a total of  1,752  from holding WNS Holdings or generate 37.06% return on investment over 90 days.

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

WNS Holdings  vs.  CSP Inc

WNS Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WNS Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, WNS Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

CSP Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CSP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, CSP is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with WNS Holdings and CSP

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

The idea behind WNS Holdings and CSP Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.