Correlation Between Genpact and SMX Public
Can any of the company-specific risk be diversified away by investing in both Genpact and SMX Public 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 SMX Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and SMX Public Limited, you can compare the effects of market volatilities on Genpact and SMX Public 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 SMX Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and SMX Public.
Diversification Opportunities for Genpact and SMX Public
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genpact and SMX is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and SMX Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMX Public Limited 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 SMX Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMX Public Limited has no effect on the direction of Genpact i.e., Genpact and SMX Public go up and down completely randomly.
Pair Corralation between Genpact and SMX Public
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.12 times more return on investment than SMX Public. However, Genpact Limited is 8.53 times less risky than SMX Public. It trades about 0.04 of its potential returns per unit of risk. SMX Public Limited is currently generating about -0.09 per unit of risk. If you would invest 3,655 in Genpact Limited on August 31, 2024 and sell it today you would earn a total of 961.00 from holding Genpact Limited or generate 26.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. SMX Public Limited
Performance |
| Timeline |
| Genpact Limited |
| SMX Public Limited |
Genpact and SMX Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and SMX Public
The main advantage of trading using opposite Genpact and SMX Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, SMX Public 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 SMX Public will offset losses from the drop in SMX Public's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| SMX Public vs. Team Inc | SMX Public vs. Lichen China Limited | SMX Public vs. System1 | SMX Public vs. Eastman Kodak Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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