Correlation Between WNS Holdings and GDS Holdings

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

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

Diversification Opportunities for WNS Holdings and GDS Holdings

-0.27

Correlation Coefficient

WNS Holdings  GDS Holdings

Very good diversification

The 3 months correlation between WNS and GDS is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and GDS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDS Holdings 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 GDS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDS Holdings has no effect on the direction of WNS Holdings i.e., WNS Holdings and GDS Holdings go up and down completely randomly.

Pair Corralation between WNS Holdings and GDS Holdings

Considering the 90-day investment horizon WNS Holdings is expected to generate 0.75 times more return on investment than GDS Holdings. However, WNS Holdings is 1.33 times less risky than GDS Holdings. It trades about 0.3 of its potential returns per unit of risk. GDS Holdings is currently generating about 0.12 per unit of risk. If you would invest  4,728  in WNS Holdings on October 26, 2024 and sell it today you would earn a total of  1,546  from holding WNS Holdings or generate 32.7% return on investment over 90 days.

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

WNS Holdings  vs.  GDS Holdings

WNS Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WNS Holdings are ranked lower than 10 (%) 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.

GDS Holdings

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GDS Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, GDS Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WNS Holdings and GDS Holdings

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

The idea behind WNS Holdings and GDS 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.