Correlation Between WNS Holdings and CSL

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

Diversification Opportunities for WNS Holdings and CSL

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between WNS Holdings and CSL is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding WNS Holdings and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of WNS Holdings i.e., WNS Holdings and CSL go up and down completely randomly.

Pair Corralation between WNS Holdings and CSL

Considering the 90-day investment horizon WNS Holdings is expected to generate 1.82 times less return on investment than CSL. But when comparing it to its historical volatility, WNS Holdings is 1.03 times less risky than CSL. It trades about 0.02 of its potential returns per unit of risk. CSL is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  9,895  in CSL on September 4, 2022 and sell it today you would earn a total of  275.00  from holding CSL or generate 2.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

WNS Holdings  vs.  CSL

 Performance (%) 
       Timeline  
WNS Holdings 
WNS Holdings Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in WNS Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, WNS Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

WNS Holdings Price Channel

CSL 
CSL Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in CSL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, CSL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CSL Price Channel

WNS Holdings and CSL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WNS Holdings and CSL

The main advantage of trading using opposite WNS Holdings and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WNS Holdings position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.
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The idea behind WNS Holdings and CSL 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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Check out your portfolio center. 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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