Correlation Between Leidos Holdings and Genpact
Can any of the company-specific risk be diversified away by investing in both Leidos Holdings 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 Leidos Holdings and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leidos Holdings and Genpact Limited, you can compare the effects of market volatilities on Leidos Holdings 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 Leidos Holdings with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leidos Holdings and Genpact.
Diversification Opportunities for Leidos Holdings and Genpact
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leidos and Genpact is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Leidos Holdings 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 Leidos Holdings 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 Leidos Holdings i.e., Leidos Holdings and Genpact go up and down completely randomly.
Pair Corralation between Leidos Holdings and Genpact
Given the investment horizon of 90 days Leidos Holdings is expected to generate 0.97 times more return on investment than Genpact. However, Leidos Holdings is 1.04 times less risky than Genpact. It trades about 0.06 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.01 per unit of risk. If you would invest 10,674 in Leidos Holdings on August 24, 2024 and sell it today you would earn a total of 5,877 from holding Leidos Holdings or generate 55.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leidos Holdings vs. Genpact Limited
Performance |
| Timeline |
| Leidos Holdings |
| Genpact Limited |
Leidos Holdings and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leidos Holdings and Genpact
The main advantage of trading using opposite Leidos Holdings and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leidos Holdings 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.| Leidos Holdings vs. CACI International | Leidos Holdings vs. Parsons Corp | Leidos Holdings vs. ASGN Inc | Leidos Holdings vs. ExlService Holdings |
| Genpact vs. Fidelity National Information | Genpact vs. International Business Machines | Genpact vs. Kyndryl Holdings | Genpact vs. DXC Technology 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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