Correlation Between Genpact and Fujitsu
Can any of the company-specific risk be diversified away by investing in both Genpact and Fujitsu 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 Fujitsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Fujitsu Limited, you can compare the effects of market volatilities on Genpact and Fujitsu 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 Fujitsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Fujitsu.
Diversification Opportunities for Genpact and Fujitsu
Very good diversification
The 3 months correlation between Genpact and Fujitsu is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Fujitsu Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujitsu 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 Fujitsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujitsu Limited has no effect on the direction of Genpact i.e., Genpact and Fujitsu go up and down completely randomly.
Pair Corralation between Genpact and Fujitsu
Taking into account the 90-day investment horizon Genpact is expected to generate 2.68 times less return on investment than Fujitsu. But when comparing it to its historical volatility, Genpact Limited is 2.63 times less risky than Fujitsu. It trades about 0.05 of its potential returns per unit of risk. Fujitsu Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Fujitsu Limited on August 29, 2024 and sell it today you would earn a total of 621.00 from holding Fujitsu Limited or generate 55.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Fujitsu Limited
Performance |
| Timeline |
| Genpact Limited |
| Fujitsu Limited |
Genpact and Fujitsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Fujitsu
The main advantage of trading using opposite Genpact and Fujitsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Fujitsu 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 Fujitsu will offset losses from the drop in Fujitsu's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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