Correlation Between Genpact and Relx PLC
Can any of the company-specific risk be diversified away by investing in both Genpact and Relx PLC 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 Relx PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Relx PLC ADR, you can compare the effects of market volatilities on Genpact and Relx PLC 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 Relx PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Relx PLC.
Diversification Opportunities for Genpact and Relx PLC
Very good diversification
The 3 months correlation between Genpact and Relx is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Relx PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Relx PLC ADR 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 Relx PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Relx PLC ADR has no effect on the direction of Genpact i.e., Genpact and Relx PLC go up and down completely randomly.
Pair Corralation between Genpact and Relx PLC
Taking into account the 90-day investment horizon Genpact is expected to generate 3.95 times less return on investment than Relx PLC. In addition to that, Genpact is 1.56 times more volatile than Relx PLC ADR. It trades about 0.02 of its total potential returns per unit of risk. Relx PLC ADR is currently generating about 0.11 per unit of volatility. If you would invest 2,751 in Relx PLC ADR on August 30, 2024 and sell it today you would earn a total of 1,930 from holding Relx PLC ADR or generate 70.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Relx PLC ADR
Performance |
| Timeline |
| Genpact Limited |
| Relx PLC ADR |
Genpact and Relx PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Relx PLC
The main advantage of trading using opposite Genpact and Relx PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Relx PLC 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 Relx PLC will offset losses from the drop in Relx PLC's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| Relx PLC vs. Maximus | Relx PLC vs. CBIZ Inc | Relx PLC vs. First Advantage Corp | Relx PLC vs. Network 1 Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |