Correlation Between Clearwater Analytics and ExlService Holdings

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

Diversification Opportunities for Clearwater Analytics and ExlService Holdings

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Clearwater and ExlService is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Analytics Holdings and ExlService Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExlService Holdings and Clearwater Analytics 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 Clearwater Analytics Holdings 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 Clearwater Analytics i.e., Clearwater Analytics and ExlService Holdings go up and down completely randomly.

Pair Corralation between Clearwater Analytics and ExlService Holdings

Given the investment horizon of 90 days Clearwater Analytics Holdings is expected to generate 1.87 times more return on investment than ExlService Holdings. However, Clearwater Analytics is 1.87 times more volatile than ExlService Holdings. It trades about 0.04 of its potential returns per unit of risk. ExlService Holdings is currently generating about -0.05 per unit of risk. If you would invest  1,893  in Clearwater Analytics Holdings on August 19, 2025 and sell it today you would earn a total of  32.00  from holding Clearwater Analytics Holdings or generate 1.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Clearwater Analytics Holdings  vs.  ExlService Holdings

 Performance 
       Timeline  
Clearwater Analytics 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Clearwater Analytics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Clearwater Analytics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
ExlService Holdings 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
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 weak 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.

Clearwater Analytics and ExlService Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clearwater Analytics and ExlService Holdings

The main advantage of trading using opposite Clearwater Analytics and ExlService Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Analytics 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 Clearwater Analytics Holdings 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.
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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