Correlation Between IHS Holding and Genpact
Can any of the company-specific risk be diversified away by investing in both IHS Holding 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 IHS Holding and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IHS Holding and Genpact Limited, you can compare the effects of market volatilities on IHS Holding 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 IHS Holding with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of IHS Holding and Genpact.
Diversification Opportunities for IHS Holding and Genpact
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between IHS and Genpact is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding IHS Holding and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and IHS Holding 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 IHS Holding 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 IHS Holding i.e., IHS Holding and Genpact go up and down completely randomly.
Pair Corralation between IHS Holding and Genpact
Considering the 90-day investment horizon IHS Holding is expected to generate 3.49 times more return on investment than Genpact. However, IHS Holding is 3.49 times more volatile than Genpact Limited. It trades about 0.0 of its potential returns per unit of risk. Genpact Limited is currently generating about -0.07 per unit of risk. If you would invest 348.00 in IHS Holding on January 25, 2024 and sell it today you would lose (7.00) from holding IHS Holding or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IHS Holding vs. Genpact Limited
Performance |
| Timeline |
| IHS Holding |
| Genpact Limited |
IHS Holding and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IHS Holding and Genpact
The main advantage of trading using opposite IHS Holding and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IHS Holding 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.| IHS Holding vs. T Mobile | IHS Holding vs. Comcast Corp | IHS Holding vs. Charter Communications | IHS Holding vs. Vodafone Group PLC |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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