Correlation Between Verisk Analytics and Genpact
Can any of the company-specific risk be diversified away by investing in both Verisk Analytics 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 Verisk Analytics and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verisk Analytics and Genpact Limited, you can compare the effects of market volatilities on Verisk Analytics 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 Verisk Analytics with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verisk Analytics and Genpact.
Diversification Opportunities for Verisk Analytics and Genpact
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Verisk and Genpact is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Verisk Analytics 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 Verisk Analytics 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 Verisk Analytics i.e., Verisk Analytics and Genpact go up and down completely randomly.
Pair Corralation between Verisk Analytics and Genpact
Given the investment horizon of 90 days Verisk Analytics is expected to generate 1.86 times less return on investment than Genpact. But when comparing it to its historical volatility, Verisk Analytics is 1.98 times less risky than Genpact. It trades about 0.42 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 3,819 in Genpact Limited on August 30, 2024 and sell it today you would earn a total of 863.00 from holding Genpact Limited or generate 22.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verisk Analytics vs. Genpact Limited
Performance |
| Timeline |
| Verisk Analytics |
| Genpact Limited |
Verisk Analytics and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verisk Analytics and Genpact
The main advantage of trading using opposite Verisk Analytics and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verisk Analytics 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.| Verisk Analytics vs. Team Inc | Verisk Analytics vs. Thermon Group Holdings | Verisk Analytics vs. MRC Global | Verisk Analytics vs. Vishay Precision Group |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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