Correlation Between Genpact and Euronet Worldwide
Can any of the company-specific risk be diversified away by investing in both Genpact and Euronet Worldwide 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 Genpact and Euronet Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Euronet Worldwide, you can compare the effects of market volatilities on Genpact and Euronet Worldwide 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 Genpact with a short position of Euronet Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Euronet Worldwide.
Diversification Opportunities for Genpact and Euronet Worldwide
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genpact and Euronet is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Euronet Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronet Worldwide and Genpact 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 Genpact Limited are associated (or correlated) with Euronet Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronet Worldwide has no effect on the direction of Genpact i.e., Genpact and Euronet Worldwide go up and down completely randomly.
Pair Corralation between Genpact and Euronet Worldwide
Taking into account the 90-day investment horizon Genpact Limited is expected to under-perform the Euronet Worldwide. But the stock apears to be less risky and, when comparing its historical volatility, Genpact Limited is 1.48 times less risky than Euronet Worldwide. The stock trades about -0.02 of its potential returns per unit of risk. The Euronet Worldwide is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 11,402 in Euronet Worldwide on January 26, 2024 and sell it today you would lose (835.00) from holding Euronet Worldwide or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Euronet Worldwide
Performance |
| Timeline |
| Genpact Limited |
| Euronet Worldwide |
Genpact and Euronet Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Euronet Worldwide
The main advantage of trading using opposite Genpact and Euronet Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Euronet Worldwide 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 Euronet Worldwide will offset losses from the drop in Euronet Worldwide's long position.| Genpact vs. CACI International | Genpact vs. CDW Corp | Genpact vs. Jack Henry Associates | Genpact vs. Broadridge Financial Solutions |
| Euronet Worldwide vs. Evertec | Euronet Worldwide vs. i3 Verticals | Euronet Worldwide vs. EverCommerce | Euronet Worldwide vs. NetScout Systems |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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