Correlation Between Genpact and CACI International
Can any of the company-specific risk be diversified away by investing in both Genpact and CACI International 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 CACI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and CACI International, you can compare the effects of market volatilities on Genpact and CACI International 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 CACI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and CACI International.
Diversification Opportunities for Genpact and CACI International
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genpact and CACI is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and CACI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CACI International 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 CACI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CACI International has no effect on the direction of Genpact i.e., Genpact and CACI International go up and down completely randomly.
Pair Corralation between Genpact and CACI International
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.75 times more return on investment than CACI International. However, Genpact Limited is 1.33 times less risky than CACI International. It trades about 0.34 of its potential returns per unit of risk. CACI International is currently generating about -0.12 per unit of risk. If you would invest 3,837 in Genpact Limited on August 24, 2024 and sell it today you would earn a total of 745.00 from holding Genpact Limited or generate 19.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. CACI International
Performance |
| Timeline |
| Genpact Limited |
| CACI International |
Genpact and CACI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and CACI International
The main advantage of trading using opposite Genpact and CACI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, CACI International 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 CACI International will offset losses from the drop in CACI International's long position.| Genpact vs. Fidelity National Information | Genpact vs. International Business Machines | Genpact vs. Kyndryl Holdings | Genpact vs. DXC Technology Co |
| CACI International vs. Leidos Holdings | CACI International vs. Parsons Corp | CACI International vs. ASGN Inc | CACI International 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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