Correlation Between Genpact and Multi Ways
Can any of the company-specific risk be diversified away by investing in both Genpact and Multi Ways 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 Multi Ways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Multi Ways Holdings, you can compare the effects of market volatilities on Genpact and Multi Ways 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 Multi Ways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Multi Ways.
Diversification Opportunities for Genpact and Multi Ways
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genpact and Multi is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Multi Ways Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Ways 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 Multi Ways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Ways Holdings has no effect on the direction of Genpact i.e., Genpact and Multi Ways go up and down completely randomly.
Pair Corralation between Genpact and Multi Ways
Taking into account the 90-day investment horizon Genpact Limited is expected to under-perform the Multi Ways. But the stock apears to be less risky and, when comparing its historical volatility, Genpact Limited is 2.95 times less risky than Multi Ways. The stock trades about -0.12 of its potential returns per unit of risk. The Multi Ways Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Multi Ways Holdings on September 18, 2024 and sell it today you would lose (0.01) from holding Multi Ways Holdings or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Multi Ways Holdings
Performance |
| Timeline |
| Genpact Limited |
| Multi Ways Holdings |
Genpact and Multi Ways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Multi Ways
The main advantage of trading using opposite Genpact and Multi Ways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Multi Ways 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 Multi Ways will offset losses from the drop in Multi Ways' long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| Multi Ways vs. FlexShopper | Multi Ways vs. Hertz Global Holdings | Multi Ways vs. HyreCar | Multi Ways vs. Avis Budget Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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