Correlation Between Genpact and CBIZ
Can any of the company-specific risk be diversified away by investing in both Genpact and CBIZ 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 CBIZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and CBIZ Inc, you can compare the effects of market volatilities on Genpact and CBIZ 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 CBIZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and CBIZ.
Diversification Opportunities for Genpact and CBIZ
Very poor diversification
The 3 months correlation between Genpact and CBIZ is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and CBIZ Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBIZ Inc 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 CBIZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBIZ Inc has no effect on the direction of Genpact i.e., Genpact and CBIZ go up and down completely randomly.
Pair Corralation between Genpact and CBIZ
Taking into account the 90-day investment horizon Genpact is expected to generate 1.03 times less return on investment than CBIZ. In addition to that, Genpact is 1.05 times more volatile than CBIZ Inc. It trades about 0.39 of its total potential returns per unit of risk. CBIZ Inc is currently generating about 0.43 per unit of volatility. If you would invest 6,686 in CBIZ Inc on August 28, 2024 and sell it today you would earn a total of 1,515 from holding CBIZ Inc or generate 22.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. CBIZ Inc
Performance |
| Timeline |
| Genpact Limited |
| CBIZ Inc |
Genpact and CBIZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and CBIZ
The main advantage of trading using opposite Genpact and CBIZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, CBIZ 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 CBIZ will offset losses from the drop in CBIZ's long position.| 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 Stocks Directory module to find actively traded stocks across global markets.
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