Correlation Between Genpact and Global Industrial
Can any of the company-specific risk be diversified away by investing in both Genpact and Global Industrial 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 Global Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Global Industrial Co, you can compare the effects of market volatilities on Genpact and Global Industrial 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 Global Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Global Industrial.
Diversification Opportunities for Genpact and Global Industrial
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genpact and Global is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Global Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Industrial 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 Global Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Industrial has no effect on the direction of Genpact i.e., Genpact and Global Industrial go up and down completely randomly.
Pair Corralation between Genpact and Global Industrial
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.83 times more return on investment than Global Industrial. However, Genpact Limited is 1.2 times less risky than Global Industrial. It trades about 0.03 of its potential returns per unit of risk. Global Industrial Co is currently generating about 0.0 per unit of risk. If you would invest 4,628 in Genpact Limited on November 19, 2024 and sell it today you would earn a total of 877.00 from holding Genpact Limited or generate 18.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Global Industrial Co
Performance |
| Timeline |
| Genpact Limited |
| Global Industrial |
Genpact and Global Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Global Industrial
The main advantage of trading using opposite Genpact and Global Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Global Industrial 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 Global Industrial will offset losses from the drop in Global Industrial's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| Global Industrial vs. Distribution Solutions Group | Global Industrial vs. Core Main | Global Industrial vs. Applied Industrial Technologies | Global Industrial vs. BlueLinx 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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