Correlation Between Cass Information and Genpact
Can any of the company-specific risk be diversified away by investing in both Cass Information 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 Cass Information and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and Genpact Limited, you can compare the effects of market volatilities on Cass Information 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 Cass Information with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Genpact.
Diversification Opportunities for Cass Information and Genpact
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cass and Genpact is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Cass Information 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 Cass Information Systems 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 Cass Information i.e., Cass Information and Genpact go up and down completely randomly.
Pair Corralation between Cass Information and Genpact
Given the investment horizon of 90 days Cass Information Systems is expected to generate 1.14 times more return on investment than Genpact. However, Cass Information is 1.14 times more volatile than Genpact Limited. It trades about 0.02 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.01 per unit of risk. If you would invest 4,192 in Cass Information Systems on September 2, 2024 and sell it today you would earn a total of 295.00 from holding Cass Information Systems or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cass Information Systems vs. Genpact Limited
Performance |
| Timeline |
| Cass Information Systems |
| Genpact Limited |
Cass Information and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Genpact
The main advantage of trading using opposite Cass Information and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information 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.| Cass Information vs. Genpact Limited | Cass Information vs. ASGN Inc | Cass Information vs. Gartner | Cass Information vs. The Hackett Group |
| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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