Correlation Between Genpact and Formula Systems
Can any of the company-specific risk be diversified away by investing in both Genpact and Formula Systems 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 Formula Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Formula Systems 1985, you can compare the effects of market volatilities on Genpact and Formula Systems 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 Formula Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Formula Systems.
Diversification Opportunities for Genpact and Formula Systems
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Genpact and Formula is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Formula Systems 1985 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula Systems 1985 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 Formula Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula Systems 1985 has no effect on the direction of Genpact i.e., Genpact and Formula Systems go up and down completely randomly.
Pair Corralation between Genpact and Formula Systems
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.95 times more return on investment than Formula Systems. However, Genpact Limited is 1.05 times less risky than Formula Systems. It trades about 0.35 of its potential returns per unit of risk. Formula Systems 1985 is currently generating about -0.05 per unit of risk. If you would invest 3,841 in Genpact Limited on August 25, 2024 and sell it today you would earn a total of 778.00 from holding Genpact Limited or generate 20.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Formula Systems 1985
Performance |
| Timeline |
| Genpact Limited |
| Formula Systems 1985 |
Genpact and Formula Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Formula Systems
The main advantage of trading using opposite Genpact and Formula Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Formula Systems 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 Formula Systems will offset losses from the drop in Formula Systems' long position.| Genpact vs. Oneconnect Financial Technology | Genpact vs. Global Business Travel | Genpact vs. Alight Inc | Genpact vs. CS Disco LLC |
| Formula Systems vs. Data Storage Corp | Formula Systems vs. Usio Inc | Formula Systems vs. ARB IOT Group | Formula Systems vs. FiscalNote 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |