Correlation Between Genpact and ESGL Holdings
Can any of the company-specific risk be diversified away by investing in both Genpact and ESGL Holdings 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 ESGL Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and ESGL Holdings Limited, you can compare the effects of market volatilities on Genpact and ESGL Holdings 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 ESGL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and ESGL Holdings.
Diversification Opportunities for Genpact and ESGL Holdings
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Genpact and ESGL is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and ESGL Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGL Holdings Limited 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 ESGL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGL Holdings Limited has no effect on the direction of Genpact i.e., Genpact and ESGL Holdings go up and down completely randomly.
Pair Corralation between Genpact and ESGL Holdings
Taking into account the 90-day investment horizon Genpact is expected to generate 8359.63 times less return on investment than ESGL Holdings. But when comparing it to its historical volatility, Genpact Limited is 137.74 times less risky than ESGL Holdings. It trades about 0.0 of its potential returns per unit of risk. ESGL Holdings Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 14,625 in ESGL Holdings Limited on September 26, 2024 and sell it today you would lose (14,623) from holding ESGL Holdings Limited or give up 99.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 83.9% |
| Values | Daily Returns |
Genpact Limited vs. ESGL Holdings Limited
Performance |
| Timeline |
| Genpact Limited |
| ESGL Holdings Limited |
Genpact and ESGL Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and ESGL Holdings
The main advantage of trading using opposite Genpact and ESGL Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, ESGL Holdings 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 ESGL Holdings will offset losses from the drop in ESGL Holdings' long position.| Genpact vs. Network 1 Technologies | Genpact vs. First Advantage Corp | Genpact vs. BrightView Holdings | Genpact vs. Civeo Corp |
| ESGL Holdings vs. Genpact Limited | ESGL Holdings vs. Broadridge Financial Solutions | ESGL Holdings vs. First Advantage Corp | ESGL Holdings vs. Franklin Covey |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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