Correlation Between Fidelity National and Genpact
Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Genpact Limited, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Genpact.
Diversification Opportunities for Fidelity National and Genpact
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fidelity and Genpact is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Genpact go up and down completely randomly.
Pair Corralation between Fidelity National and Genpact
Considering the 90-day investment horizon Fidelity National Information is expected to under-perform the Genpact. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 2.01 times less risky than Genpact. The stock trades about -0.2 of its potential returns per unit of risk. The Genpact Limited is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 3,830 in Genpact Limited on August 27, 2024 and sell it today you would earn a total of 834.00 from holding Genpact Limited or generate 21.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Genpact Limited
Performance |
| Timeline |
| Fidelity National |
| Genpact Limited |
Fidelity National and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Genpact
The main advantage of trading using opposite Fidelity National and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.| Fidelity National vs. Jack Henry Associates | Fidelity National vs. Cognizant Technology Solutions | Fidelity National vs. CDW Corp | Fidelity National vs. Gartner |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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