Correlation Between Spire Global and Genpact
Can any of the company-specific risk be diversified away by investing in both Spire Global 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 Spire Global and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Global and Genpact Limited, you can compare the effects of market volatilities on Spire Global 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 Spire Global with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Global and Genpact.
Diversification Opportunities for Spire Global and Genpact
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spire and Genpact is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Spire Global 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 Spire Global 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 Spire Global i.e., Spire Global and Genpact go up and down completely randomly.
Pair Corralation between Spire Global and Genpact
Given the investment horizon of 90 days Spire Global is expected to generate 3.43 times more return on investment than Genpact. However, Spire Global is 3.43 times more volatile than Genpact Limited. It trades about 0.05 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.02 per unit of risk. If you would invest 952.00 in Spire Global on August 28, 2024 and sell it today you would earn a total of 710.00 from holding Spire Global or generate 74.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Global vs. Genpact Limited
Performance |
| Timeline |
| Spire Global |
| Genpact Limited |
Spire Global and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Global and Genpact
The main advantage of trading using opposite Spire Global and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Global 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.| Spire Global vs. Genpact Limited | Spire Global vs. Broadridge Financial Solutions | Spire Global vs. First Advantage Corp | Spire Global vs. Franklin Covey |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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