Correlation Between Applied Digital and ExlService Holdings

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

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

Diversification Opportunities for Applied Digital and ExlService Holdings

-0.62

Correlation Coefficient

Applied Digital  ExlService Holdings

Excellent diversification

The 3 months correlation between Applied and ExlService is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Applied Digital and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Applied Digital 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 Applied Digital are associated (or correlated) with ExlService Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExlService Holdings has no effect on the direction of Applied Digital i.e., Applied Digital and ExlService Holdings go up and down completely randomly.

Pair Corralation between Applied Digital and ExlService Holdings

Given the investment horizon of 90 days Applied Digital is expected to generate 3.68 times more return on investment than ExlService Holdings. However, Applied Digital is 3.68 times more volatile than ExlService Holdings. It trades about 0.12 of its potential returns per unit of risk. ExlService Holdings is currently generating about -0.1 per unit of risk. If you would invest  1,647  in Applied Digital on August 26, 2025 and sell it today you would earn a total of  732.00  from holding Applied Digital or generate 44.44% return on investment over 90 days.

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

Applied Digital  vs.  ExlService Holdings

Applied Digital

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Digital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Applied Digital exhibited solid returns over the last few months and may actually be approaching a breakup point.

ExlService Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days ExlService Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Applied Digital and ExlService Holdings

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

The idea behind Applied Digital and ExlService 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.

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 the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.