Correlation Between ExlService Holdings and Aurora Innovation

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

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

Diversification Opportunities for ExlService Holdings and Aurora Innovation

0.57

Correlation Coefficient

ExlService Holdings  Aurora Innovation

Very weak diversification

The 3 months correlation between ExlService and Aurora is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Aurora Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Innovation 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 Aurora Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Innovation has no effect on the direction of ExlService Holdings i.e., ExlService Holdings and Aurora Innovation go up and down completely randomly.

Pair Corralation between ExlService Holdings and Aurora Innovation

Given the investment horizon of 90 days ExlService Holdings is expected to generate 0.53 times more return on investment than Aurora Innovation. However, ExlService Holdings is 1.9 times less risky than Aurora Innovation. It trades about -0.06 of its potential returns per unit of risk. Aurora Innovation is currently generating about -0.15 per unit of risk. If you would invest  4,220  in ExlService Holdings on August 8, 2025 and sell it today you would lose (273.00) from holding ExlService Holdings or give up 6.47% of portfolio value over 90 days.

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

ExlService Holdings  vs.  Aurora Innovation

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 comparatively stable essential indicators, ExlService Holdings is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Aurora Innovation

Risk-Adjusted Performance

Weakest

Over the last 90 days Aurora Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with ExlService Holdings and Aurora Innovation

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

The idea behind ExlService Holdings and Aurora Innovation 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.