Correlation Between Genpact and GMS
Can any of the company-specific risk be diversified away by investing in both Genpact and GMS 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 GMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and GMS Inc, you can compare the effects of market volatilities on Genpact and GMS 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 GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and GMS.
Diversification Opportunities for Genpact and GMS
Poor diversification
The 3 months correlation between Genpact and GMS is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Genpact i.e., Genpact and GMS go up and down completely randomly.
Pair Corralation between Genpact and GMS
Taking into account the 90-day investment horizon Genpact is expected to generate 1.25 times less return on investment than GMS. But when comparing it to its historical volatility, Genpact Limited is 1.07 times less risky than GMS. It trades about 0.08 of its potential returns per unit of risk. GMS Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,764 in GMS Inc on August 26, 2024 and sell it today you would earn a total of 3,406 from holding GMS Inc or generate 50.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. GMS Inc
Performance |
| Timeline |
| Genpact Limited |
| GMS Inc |
Genpact and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and GMS
The main advantage of trading using opposite Genpact and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's long position.| Genpact vs. Oneconnect Financial Technology | Genpact vs. Global Business Travel | Genpact vs. Alight Inc | Genpact vs. CS Disco LLC |
| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |