Correlation Between Genpact and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Genpact and Fidelity Advisor 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 Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Fidelity Advisor Industrials, you can compare the effects of market volatilities on Genpact and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Fidelity Advisor.
Diversification Opportunities for Genpact and Fidelity Advisor
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Genpact and Fidelity is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Fidelity Advisor Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Ind 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Ind has no effect on the direction of Genpact i.e., Genpact and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Genpact and Fidelity Advisor
Taking into account the 90-day investment horizon Genpact Limited is expected to under-perform the Fidelity Advisor. In addition to that, Genpact is 1.18 times more volatile than Fidelity Advisor Industrials. It trades about -0.14 of its total potential returns per unit of risk. Fidelity Advisor Industrials is currently generating about -0.08 per unit of volatility. If you would invest 4,114 in Fidelity Advisor Industrials on September 13, 2024 and sell it today you would lose (63.00) from holding Fidelity Advisor Industrials or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Fidelity Advisor Industrials
Performance |
| Timeline |
| Genpact Limited |
| Fidelity Advisor Ind |
Genpact and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Fidelity Advisor
The main advantage of trading using opposite Genpact and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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