Correlation Between Jacobs Solutions and Genpact
Can any of the company-specific risk be diversified away by investing in both Jacobs Solutions and Genpact 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 Jacobs Solutions and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacobs Solutions and Genpact Limited, you can compare the effects of market volatilities on Jacobs Solutions and Genpact 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 Jacobs Solutions with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacobs Solutions and Genpact.
Diversification Opportunities for Jacobs Solutions and Genpact
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jacobs and Genpact is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jacobs Solutions and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Jacobs Solutions 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 Jacobs Solutions are associated (or correlated) with Genpact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genpact Limited has no effect on the direction of Jacobs Solutions i.e., Jacobs Solutions and Genpact go up and down completely randomly.
Pair Corralation between Jacobs Solutions and Genpact
Taking into account the 90-day investment horizon Jacobs Solutions is expected to under-perform the Genpact. In addition to that, Jacobs Solutions is 1.33 times more volatile than Genpact Limited. It trades about -0.23 of its total potential returns per unit of risk. Genpact Limited is currently generating about -0.19 per unit of volatility. If you would invest 5,022 in Genpact Limited on January 7, 2025 and sell it today you would lose (315.00) from holding Genpact Limited or give up 6.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacobs Solutions vs. Genpact Limited
Performance |
| Timeline |
| Jacobs Solutions |
| Genpact Limited |
Jacobs Solutions and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacobs Solutions and Genpact
The main advantage of trading using opposite Jacobs Solutions and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacobs Solutions position performs unexpectedly, Genpact 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 Genpact will offset losses from the drop in Genpact's long position.| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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