Correlation Between Genpact and ATIF Holdings
Can any of the company-specific risk be diversified away by investing in both Genpact and ATIF Holdings 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 Genpact and ATIF Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and ATIF Holdings, you can compare the effects of market volatilities on Genpact and ATIF Holdings 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 Genpact with a short position of ATIF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and ATIF Holdings.
Diversification Opportunities for Genpact and ATIF Holdings
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genpact and ATIF is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and ATIF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATIF Holdings and Genpact 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 Genpact Limited are associated (or correlated) with ATIF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATIF Holdings has no effect on the direction of Genpact i.e., Genpact and ATIF Holdings go up and down completely randomly.
Pair Corralation between Genpact and ATIF Holdings
Taking into account the 90-day investment horizon Genpact is expected to generate 1.81 times less return on investment than ATIF Holdings. But when comparing it to its historical volatility, Genpact Limited is 6.52 times less risky than ATIF Holdings. It trades about 0.18 of its potential returns per unit of risk. ATIF Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 64.00 in ATIF Holdings on September 2, 2024 and sell it today you would earn a total of 1.00 from holding ATIF Holdings or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. ATIF Holdings
Performance |
| Timeline |
| Genpact Limited |
| ATIF Holdings |
Genpact and ATIF Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and ATIF Holdings
The main advantage of trading using opposite Genpact and ATIF Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, ATIF Holdings 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 ATIF Holdings will offset losses from the drop in ATIF Holdings' long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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