Correlation Between Genpact and ZTO Express
Can any of the company-specific risk be diversified away by investing in both Genpact and ZTO Express 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 ZTO Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and ZTO Express, you can compare the effects of market volatilities on Genpact and ZTO Express 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 ZTO Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and ZTO Express.
Diversification Opportunities for Genpact and ZTO Express
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genpact and ZTO is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and ZTO Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZTO Express 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 ZTO Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZTO Express has no effect on the direction of Genpact i.e., Genpact and ZTO Express go up and down completely randomly.
Pair Corralation between Genpact and ZTO Express
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.74 times more return on investment than ZTO Express. However, Genpact Limited is 1.34 times less risky than ZTO Express. It trades about 0.08 of its potential returns per unit of risk. ZTO Express is currently generating about 0.0 per unit of risk. If you would invest 3,386 in Genpact Limited on September 2, 2024 and sell it today you would earn a total of 1,230 from holding Genpact Limited or generate 36.33% 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. ZTO Express
Performance |
| Timeline |
| Genpact Limited |
| ZTO Express |
Genpact and ZTO Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and ZTO Express
The main advantage of trading using opposite Genpact and ZTO Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, ZTO Express 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 ZTO Express will offset losses from the drop in ZTO Express' long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| ZTO Express vs. Forward Air | ZTO Express vs. Landstar System | ZTO Express vs. JB Hunt Transport | ZTO Express vs. Expeditors International of |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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