Correlation Between First Advantage and Genpact
Can any of the company-specific risk be diversified away by investing in both First Advantage 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 First Advantage and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Advantage Corp and Genpact Limited, you can compare the effects of market volatilities on First Advantage 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 First Advantage with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Advantage and Genpact.
Diversification Opportunities for First Advantage and Genpact
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Genpact is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Advantage Corp and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and First Advantage 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 First Advantage Corp 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 First Advantage i.e., First Advantage and Genpact go up and down completely randomly.
Pair Corralation between First Advantage and Genpact
Allowing for the 90-day total investment horizon First Advantage Corp is expected to generate 1.05 times more return on investment than Genpact. However, First Advantage is 1.05 times more volatile than Genpact Limited. It trades about 0.06 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.01 per unit of risk. If you would invest 1,180 in First Advantage Corp on August 26, 2024 and sell it today you would earn a total of 730.00 from holding First Advantage Corp or generate 61.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Advantage Corp vs. Genpact Limited
Performance |
| Timeline |
| First Advantage Corp |
| Genpact Limited |
First Advantage and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Advantage and Genpact
The main advantage of trading using opposite First Advantage and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Advantage 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.| First Advantage vs. ExlService Holdings | First Advantage vs. WNS Holdings | First Advantage vs. Gartner | First Advantage vs. The Hackett Group |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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