Correlation Between Genpact and Barnes
Can any of the company-specific risk be diversified away by investing in both Genpact and Barnes 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 Barnes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Barnes Group, you can compare the effects of market volatilities on Genpact and Barnes 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 Barnes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Barnes.
Diversification Opportunities for Genpact and Barnes
Very weak diversification
The 3 months correlation between Genpact and Barnes is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Barnes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Group 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 Barnes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnes Group has no effect on the direction of Genpact i.e., Genpact and Barnes go up and down completely randomly.
Pair Corralation between Genpact and Barnes
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 24.65 times more return on investment than Barnes. However, Genpact is 24.65 times more volatile than Barnes Group. It trades about 0.39 of its potential returns per unit of risk. Barnes Group is currently generating about 0.12 per unit of risk. If you would invest 3,830 in Genpact Limited on August 28, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Barnes Group
Performance |
| Timeline |
| Genpact Limited |
| Barnes Group |
Genpact and Barnes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Barnes
The main advantage of trading using opposite Genpact and Barnes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Barnes 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 Barnes will offset losses from the drop in Barnes' long position.| Genpact vs. Oneconnect Financial Technology | Genpact vs. Global Business Travel | Genpact vs. Alight Inc | Genpact vs. CS Disco LLC |
| Barnes vs. Aquagold International | Barnes vs. Morningstar Unconstrained Allocation | Barnes vs. High Yield Municipal Fund | Barnes vs. Thrivent High Yield |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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