Correlation Between Genpact and GDS Holdings
Can any of the company-specific risk be diversified away by investing in both Genpact and GDS 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 GDS 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 GDS Holdings, you can compare the effects of market volatilities on Genpact and GDS 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 GDS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and GDS Holdings.
Diversification Opportunities for Genpact and GDS Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Genpact and GDS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and GDS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDS Holdings 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 GDS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDS Holdings has no effect on the direction of Genpact i.e., Genpact and GDS Holdings go up and down completely randomly.
Pair Corralation between Genpact and GDS Holdings
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.43 times more return on investment than GDS Holdings. However, Genpact Limited is 2.34 times less risky than GDS Holdings. It trades about 0.39 of its potential returns per unit of risk. GDS Holdings is currently generating about -0.1 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 Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. GDS Holdings
Performance |
| Timeline |
| Genpact Limited |
| GDS Holdings |
Genpact and GDS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and GDS Holdings
The main advantage of trading using opposite Genpact and GDS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, GDS 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 GDS Holdings will offset losses from the drop in GDS Holdings' long position.| Genpact vs. Oneconnect Financial Technology | Genpact vs. Global Business Travel | Genpact vs. Alight Inc | Genpact vs. CS Disco LLC |
| GDS Holdings vs. Oneconnect Financial Technology | GDS Holdings vs. Global Business Travel | GDS Holdings vs. Alight Inc | GDS Holdings vs. CS Disco LLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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