Correlation Between ExlService Holdings and Chindata Group

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

Diversification Opportunities for ExlService Holdings and Chindata Group

0.77

Correlation Coefficient

ExlService Holdings  Chindata Group

Poor diversification

The 3 months correlation between ExlService and Chindata is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Chindata Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chindata Group Holdings 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 Chindata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chindata Group Holdings has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Chindata Group go up and down completely randomly.

Pair Corralation between ExlService Holdings and Chindata Group

If you would invest  3,638  in ExlService Holdings on September 13, 2024 and sell it today you would earn a total of  987.00  from holding ExlService Holdings or generate 27.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

ExlService Holdings  vs.  Chindata Group Holdings

ExlService Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ExlService Holdings are ranked lower than 21 (%) 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.

Chindata Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chindata Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chindata Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with ExlService Holdings and Chindata Group

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

The idea behind ExlService Holdings and Chindata Group 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..