Correlation Between Genpact and Euro Tech
Can any of the company-specific risk be diversified away by investing in both Genpact and Euro Tech 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 Euro Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Euro Tech Holdings, you can compare the effects of market volatilities on Genpact and Euro Tech 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 Euro Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Euro Tech.
Diversification Opportunities for Genpact and Euro Tech
Excellent diversification
The 3 months correlation between Genpact and Euro is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Euro Tech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Tech 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 Euro Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Tech Holdings has no effect on the direction of Genpact i.e., Genpact and Euro Tech go up and down completely randomly.
Pair Corralation between Genpact and Euro Tech
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 1.29 times more return on investment than Euro Tech. However, Genpact is 1.29 times more volatile than Euro Tech Holdings. It trades about 0.38 of its potential returns per unit of risk. Euro Tech Holdings is currently generating about -0.16 per unit of risk. If you would invest 3,819 in Genpact Limited on August 30, 2024 and sell it today you would earn a total of 830.00 from holding Genpact Limited or generate 21.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Genpact Limited vs. Euro Tech Holdings
Performance |
| Timeline |
| Genpact Limited |
| Euro Tech Holdings |
Genpact and Euro Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Euro Tech
The main advantage of trading using opposite Genpact and Euro Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Euro Tech 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 Euro Tech will offset losses from the drop in Euro Tech's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| Euro Tech vs. LiqTech International | Euro Tech vs. TOMI Environmental Solutions | Euro Tech vs. ClearSign Combustion | Euro Tech vs. Vow ASA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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