Correlation Between Equifax and Genpact
Can any of the company-specific risk be diversified away by investing in both Equifax 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 Equifax and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equifax and Genpact Limited, you can compare the effects of market volatilities on Equifax 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 Equifax with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equifax and Genpact.
Diversification Opportunities for Equifax and Genpact
Excellent diversification
The 3 months correlation between Equifax and Genpact is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Equifax and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Equifax 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 Equifax 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 Equifax i.e., Equifax and Genpact go up and down completely randomly.
Pair Corralation between Equifax and Genpact
Considering the 90-day investment horizon Equifax is expected to under-perform the Genpact. But the stock apears to be less risky and, when comparing its historical volatility, Equifax is 1.28 times less risky than Genpact. The stock trades about -0.07 of its potential returns per unit of risk. The Genpact Limited is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 3,819 in Genpact Limited on August 30, 2024 and sell it today you would earn a total of 863.00 from holding Genpact Limited or generate 22.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equifax vs. Genpact Limited
Performance |
| Timeline |
| Equifax |
| Genpact Limited |
Equifax and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equifax and Genpact
The main advantage of trading using opposite Equifax and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equifax 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.| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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