Correlation Between ABM Industries and Genpact
Can any of the company-specific risk be diversified away by investing in both ABM Industries and Genpact 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 ABM Industries and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABM Industries Incorporated and Genpact Limited, you can compare the effects of market volatilities on ABM Industries and Genpact 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 ABM Industries with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABM Industries and Genpact.
Diversification Opportunities for ABM Industries and Genpact
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ABM and Genpact is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ABM Industries Incorporated and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and ABM Industries 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 ABM Industries Incorporated are associated (or correlated) with Genpact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genpact Limited has no effect on the direction of ABM Industries i.e., ABM Industries and Genpact go up and down completely randomly.
Pair Corralation between ABM Industries and Genpact
Considering the 90-day investment horizon ABM Industries Incorporated is expected to generate 1.08 times more return on investment than Genpact. However, ABM Industries is 1.08 times more volatile than Genpact Limited. It trades about 0.08 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.08 per unit of risk. If you would invest 3,856 in ABM Industries Incorporated on August 25, 2024 and sell it today you would earn a total of 1,823 from holding ABM Industries Incorporated or generate 47.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABM Industries Incorporated vs. Genpact Limited
Performance |
| Timeline |
| ABM Industries |
| Genpact Limited |
ABM Industries and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABM Industries and Genpact
The main advantage of trading using opposite ABM Industries and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABM Industries position performs unexpectedly, Genpact 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 Genpact will offset losses from the drop in Genpact's long position.| ABM Industries vs. Genpact Limited | ABM Industries vs. Broadridge Financial Solutions | ABM Industries vs. First Advantage Corp | ABM Industries vs. Franklin Covey |
| Genpact vs. Oneconnect Financial Technology | Genpact vs. Global Business Travel | Genpact vs. Alight Inc | Genpact vs. CS Disco LLC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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