Correlation Between NYSE Composite and Genpact
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Genpact Limited, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Genpact.
Diversification Opportunities for NYSE Composite and Genpact
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Genpact is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Genpact go up and down completely randomly.
Pair Corralation between NYSE Composite and Genpact
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.44 times more return on investment than Genpact. However, NYSE Composite is 2.27 times less risky than Genpact. It trades about 0.08 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.01 per unit of risk. If you would invest 1,532,846 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 479,499 from holding NYSE Composite or generate 31.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Genpact Limited
Performance |
| Timeline |
NYSE Composite and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Genpact Limited
Pair trading matchups for Genpact
Pair Trading with NYSE Composite and Genpact
The main advantage of trading using opposite NYSE Composite and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Genpact vs. Oneconnect Financial Technology | Genpact vs. Global Business Travel | Genpact vs. Alight Inc | Genpact vs. CS Disco LLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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