Correlation Between Genpact and Verisk Analytics
Can any of the company-specific risk be diversified away by investing in both Genpact and Verisk Analytics 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 Verisk Analytics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Verisk Analytics, you can compare the effects of market volatilities on Genpact and Verisk Analytics 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 Verisk Analytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Verisk Analytics.
Diversification Opportunities for Genpact and Verisk Analytics
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Genpact and Verisk is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Verisk Analytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verisk Analytics 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 Verisk Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verisk Analytics has no effect on the direction of Genpact i.e., Genpact and Verisk Analytics go up and down completely randomly.
Pair Corralation between Genpact and Verisk Analytics
Taking into account the 90-day investment horizon Genpact Limited is expected to generate 1.41 times more return on investment than Verisk Analytics. However, Genpact is 1.41 times more volatile than Verisk Analytics. It trades about -0.06 of its potential returns per unit of risk. Verisk Analytics is currently generating about -0.22 per unit of risk. If you would invest 3,231 in Genpact Limited on January 26, 2024 and sell it today you would lose (55.00) from holding Genpact Limited or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Verisk Analytics
Performance |
| Timeline |
| Genpact Limited |
| Verisk Analytics |
Genpact and Verisk Analytics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Verisk Analytics
The main advantage of trading using opposite Genpact and Verisk Analytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Verisk Analytics 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 Verisk Analytics will offset losses from the drop in Verisk Analytics' long position.| Genpact vs. CACI International | Genpact vs. CDW Corp | Genpact vs. Jack Henry Associates | Genpact vs. Broadridge Financial Solutions |
| Verisk Analytics vs. CRA International | Verisk Analytics vs. Thermon Group Holdings | Verisk Analytics vs. Forestar Group | Verisk Analytics vs. Alamo Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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