Correlation Between WNS Holdings and Leidos Holdings

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

Diversification Opportunities for WNS Holdings and Leidos Holdings

-0.59

Correlation Coefficient

WNS Holdings  Leidos Holdings

Excellent diversification

The 3 months correlation between WNS and Leidos is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and Leidos Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leidos 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 Leidos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leidos Holdings has no effect on the direction of WNS Holdings i.e., WNS Holdings and Leidos Holdings go up and down completely randomly.

Pair Corralation between WNS Holdings and Leidos Holdings

Considering the 90-day investment horizon WNS Holdings is expected to generate 1.76 times more return on investment than Leidos Holdings. However, WNS Holdings is 1.76 times more volatile than Leidos Holdings. It trades about 0.16 of its potential returns per unit of risk. Leidos Holdings is currently generating about -0.04 per unit of risk. If you would invest  4,679  in WNS Holdings on December 27, 2024 and sell it today you would earn a total of  1,734  from holding WNS Holdings or generate 37.06% return on investment over 90 days.

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

WNS Holdings  vs.  Leidos Holdings

WNS Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WNS Holdings are ranked lower than 12 (%) 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.

Leidos Holdings

Risk-Adjusted Performance

Very Weak

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

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

The idea behind WNS Holdings and Leidos 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.