Correlation Between Genpact and Stanley Black
Can any of the company-specific risk be diversified away by investing in both Genpact and Stanley Black 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 Stanley Black into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Stanley Black Decker, you can compare the effects of market volatilities on Genpact and Stanley Black 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 Stanley Black. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Stanley Black.
Diversification Opportunities for Genpact and Stanley Black
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genpact and Stanley is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Stanley Black Decker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Black Decker 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 Stanley Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Black Decker has no effect on the direction of Genpact i.e., Genpact and Stanley Black go up and down completely randomly.
Pair Corralation between Genpact and Stanley Black
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.89 times more return on investment than Stanley Black. However, Genpact Limited is 1.12 times less risky than Stanley Black. It trades about 0.16 of its potential returns per unit of risk. Stanley Black Decker is currently generating about -0.13 per unit of risk. If you would invest 3,913 in Genpact Limited on November 1, 2024 and sell it today you would earn a total of 851.00 from holding Genpact Limited or generate 21.75% 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. Stanley Black Decker
Performance |
| Timeline |
| Genpact Limited |
| Stanley Black Decker |
Genpact and Stanley Black Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Stanley Black
The main advantage of trading using opposite Genpact and Stanley Black positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Stanley Black 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 Stanley Black will offset losses from the drop in Stanley Black's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| Stanley Black vs. Toro Co | Stanley Black vs. Timken Company | Stanley Black vs. Lincoln Electric Holdings | Stanley Black vs. Kennametal |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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