Correlation Between Genpact and Covenant Logistics
Can any of the company-specific risk be diversified away by investing in both Genpact and Covenant Logistics 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 Covenant Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Covenant Logistics Group,, you can compare the effects of market volatilities on Genpact and Covenant Logistics 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 Covenant Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Covenant Logistics.
Diversification Opportunities for Genpact and Covenant Logistics
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Genpact and Covenant is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Covenant Logistics Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covenant Logistics 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 Covenant Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covenant Logistics Group, has no effect on the direction of Genpact i.e., Genpact and Covenant Logistics go up and down completely randomly.
Pair Corralation between Genpact and Covenant Logistics
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.89 times more return on investment than Covenant Logistics. However, Genpact Limited is 1.12 times less risky than Covenant Logistics. It trades about 0.38 of its potential returns per unit of risk. Covenant Logistics Group, is currently generating about 0.24 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Covenant Logistics Group,
Performance |
| Timeline |
| Genpact Limited |
| Covenant Logistics Group, |
Genpact and Covenant Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Covenant Logistics
The main advantage of trading using opposite Genpact and Covenant Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Covenant Logistics 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 Covenant Logistics will offset losses from the drop in Covenant Logistics' long position.| Genpact vs. Oneconnect Financial Technology | Genpact vs. Global Business Travel | Genpact vs. Alight Inc | Genpact vs. CS Disco LLC |
| Covenant Logistics vs. ArcBest Corp | Covenant Logistics vs. Knight Transportation | Covenant Logistics vs. Universal Logistics Holdings | Covenant Logistics vs. Heartland Express |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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