Correlation Between Accenture Plc and Genpact
Can any of the company-specific risk be diversified away by investing in both Accenture Plc 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 Accenture Plc and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Genpact Limited, you can compare the effects of market volatilities on Accenture Plc 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 Accenture Plc with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Genpact.
Diversification Opportunities for Accenture Plc and Genpact
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Accenture and Genpact is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Accenture Plc 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 Accenture plc 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 Accenture Plc i.e., Accenture Plc and Genpact go up and down completely randomly.
Pair Corralation between Accenture Plc and Genpact
Considering the 90-day investment horizon Accenture plc is expected to under-perform the Genpact. In addition to that, Accenture Plc is 1.05 times more volatile than Genpact Limited. It trades about -0.19 of its total potential returns per unit of risk. Genpact Limited is currently generating about -0.08 per unit of volatility. If you would invest 3,220 in Genpact Limited on January 24, 2024 and sell it today you would lose (66.00) from holding Genpact Limited or give up 2.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Accenture plc vs. Genpact Limited
Performance |
Timeline |
Accenture plc |
Genpact Limited |
Accenture Plc and Genpact Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Accenture Plc and Genpact
The main advantage of trading using opposite Accenture Plc and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc 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.Accenture Plc vs. FiscalNote Holdings | Accenture Plc vs. Innodata | Accenture Plc vs. Aurora Innovation | Accenture Plc vs. Conduent |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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